Correlation Between Brookfield Business and Isracard
Can any of the company-specific risk be diversified away by investing in both Brookfield Business and Isracard 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 Brookfield Business and Isracard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brookfield Business Partners and Isracard, you can compare the effects of market volatilities on Brookfield Business and Isracard 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 Brookfield Business with a short position of Isracard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Business and Isracard.
Diversification Opportunities for Brookfield Business and Isracard
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Brookfield and Isracard is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Business Partners and Isracard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Isracard and Brookfield Business 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 Brookfield Business Partners are associated (or correlated) with Isracard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Isracard has no effect on the direction of Brookfield Business i.e., Brookfield Business and Isracard go up and down completely randomly.
Pair Corralation between Brookfield Business and Isracard
Considering the 90-day investment horizon Brookfield Business Partners is expected to under-perform the Isracard. But the stock apears to be less risky and, when comparing its historical volatility, Brookfield Business Partners is 1.54 times less risky than Isracard. The stock trades about -0.32 of its potential returns per unit of risk. The Isracard is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 134,700 in Isracard on January 23, 2024 and sell it today you would earn a total of 7,000 from holding Isracard or generate 5.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 85.0% |
| Values | Daily Returns |
Brookfield Business Partners vs. Isracard
Performance |
| Timeline |
| Brookfield Business |
| Isracard |
Brookfield Business and Isracard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Business and Isracard
The main advantage of trading using opposite Brookfield Business and Isracard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Business position performs unexpectedly, Isracard 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 Isracard will offset losses from the drop in Isracard's long position.| Brookfield Business vs. Steel Partners Holdings | Brookfield Business vs. Compass Diversified | Brookfield Business vs. Matthews International | Brookfield Business vs. Tejon Ranch Co |
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Check out your portfolio center.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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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