Correlation Between Altagas Cum and Brookfield

Can any of the company-specific risk be diversified away by investing in both Altagas Cum and Brookfield at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Altagas Cum and Brookfield into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Altagas Cum Red and Brookfield, you can compare the effects of market volatilities on Altagas Cum and Brookfield and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Altagas Cum with a short position of Brookfield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altagas Cum and Brookfield.

Diversification Opportunities for Altagas Cum and Brookfield

0.6

Correlation Coefficient

Altagas Cum  Brookfield

Poor diversification

The 3 months correlation between Altagas and Brookfield is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Altagas Cum Red and Brookfield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield and Altagas Cum is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Altagas Cum Red are associated (or correlated) with Brookfield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield has no effect on the direction of Altagas Cum i.e., Altagas Cum and Brookfield go up and down completely randomly.

Pair Corralation between Altagas Cum and Brookfield

Assuming the 90 days trading horizon Altagas Cum Red is expected to under-perform the Brookfield. But the preferred stock apears to be less risky and, when comparing its historical volatility, Altagas Cum Red is 1.01 times less risky than Brookfield. The preferred stock trades about -0.06 of its potential returns per unit of risk. The Brookfield is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  2,268  in Brookfield on April 4, 2024 and sell it today you would earn a total of  39.00  from holding Brookfield or generate 1.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Altagas Cum Red  vs.  Brookfield

Altagas Cum Red

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Altagas Cum Red are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Altagas Cum is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Brookfield

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Brookfield are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Brookfield may actually be approaching a critical reversion point that can send shares even higher in August 2024.

Pair Trading with Altagas Cum and Brookfield

The main advantage of trading using opposite Altagas Cum and Brookfield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altagas Cum position performs unexpectedly, Brookfield can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Brookfield will offset losses from the drop in Brookfield's long position.

The idea behind Altagas Cum Red and Brookfield pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.