Correlation Between Bank of New York and Brookfield Asset
Can any of the company-specific risk be diversified away by investing in both Bank of New York and Brookfield Asset 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 Bank of New York and Brookfield Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of New and Brookfield Asset Management, you can compare the effects of market volatilities on Bank of New York and Brookfield Asset 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 Bank of New York with a short position of Brookfield Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of New York and Brookfield Asset.
Diversification Opportunities for Bank of New York and Brookfield Asset
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Brookfield is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Bank of New and Brookfield Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Asset Man and Bank of New York 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 Bank of New are associated (or correlated) with Brookfield Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield Asset Man has no effect on the direction of Bank of New York i.e., Bank of New York and Brookfield Asset go up and down completely randomly.
Pair Corralation between Bank of New York and Brookfield Asset
Allowing for the 90-day total investment horizon Bank of New is expected to generate 0.62 times more return on investment than Brookfield Asset. However, Bank of New is 1.62 times less risky than Brookfield Asset. It trades about 0.04 of its potential returns per unit of risk. Brookfield Asset Management is currently generating about -0.01 per unit of risk. If you would invest 4,385 in Bank of New on January 20, 2024 and sell it today you would earn a total of 1,140 from holding Bank of New or generate 26.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of New vs. Brookfield Asset Management
Performance |
| Timeline |
| Bank of New York |
| Brookfield Asset Man |
Bank of New York and Brookfield Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of New York and Brookfield Asset
The main advantage of trading using opposite Bank of New York and Brookfield Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of New York position performs unexpectedly, Brookfield Asset 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 Asset will offset losses from the drop in Brookfield Asset's long position.| Bank of New York vs. OCA Acquisition Corp | Bank of New York vs. Portage Fintech Acquisition | Bank of New York vs. Swiftmerge Acquisition Corp | Bank of New York vs. Four Leaf Acquisition |
| Brookfield Asset vs. OCA Acquisition Corp | Brookfield Asset vs. Portage Fintech Acquisition | Brookfield Asset vs. Swiftmerge Acquisition Corp | Brookfield Asset vs. Four Leaf Acquisition |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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