Correlation Between Easterly Acquisition and Brookfield Business

Can any of the company-specific risk be diversified away by investing in both Easterly Acquisition and Brookfield Business 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 Easterly Acquisition and Brookfield Business into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Easterly Acquisition Corp and Brookfield Business Partners, you can compare the effects of market volatilities on Easterly Acquisition and Brookfield Business 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 Easterly Acquisition with a short position of Brookfield Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of Easterly Acquisition and Brookfield Business.

Diversification Opportunities for Easterly Acquisition and Brookfield Business

0.0

Correlation Coefficient

Easterly Acquisition  Brookfield Business

Pay attention - limited upside

The 3 months correlation between Easterly and Brookfield is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Easterly Acquisition Corp and Brookfield Business Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Business and Easterly Acquisition 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 Easterly Acquisition Corp are associated (or correlated) with Brookfield Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield Business has no effect on the direction of Easterly Acquisition i.e., Easterly Acquisition and Brookfield Business go up and down completely randomly.

Pair Corralation between Easterly Acquisition and Brookfield Business

If you would invest  1,655  in Brookfield Business Partners on February 28, 2024 and sell it today you would earn a total of  234.00  from holding Brookfield Business Partners or generate 14.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Easterly Acquisition Corp  vs.  Brookfield Business Partners

Easterly Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Easterly Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, Easterly Acquisition is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Brookfield Business

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brookfield Business Partners has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental drivers remain comparatively stable which may send shares a bit higher in June 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Easterly Acquisition and Brookfield Business

The main advantage of trading using opposite Easterly Acquisition and Brookfield Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Easterly Acquisition position performs unexpectedly, Brookfield Business 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 Business will offset losses from the drop in Brookfield Business' long position.

The idea behind Easterly Acquisition Corp and Brookfield Business Partners 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.