Correlation Between WinVest Acquisition and Brookfield Business

Can any of the company-specific risk be diversified away by investing in both WinVest 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 WinVest 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 WinVest Acquisition Corp and Brookfield Business Corp, you can compare the effects of market volatilities on WinVest 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 WinVest Acquisition with a short position of Brookfield Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of WinVest Acquisition and Brookfield Business.

Diversification Opportunities for WinVest Acquisition and Brookfield Business

-0.5

Correlation Coefficient

WinVest Acquisition  Brookfield Business

Very good diversification

The 3 months correlation between WinVest and Brookfield is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding WinVest Acquisition Corp and Brookfield Business Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Business Corp and WinVest 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 WinVest 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 Corp has no effect on the direction of WinVest Acquisition i.e., WinVest Acquisition and Brookfield Business go up and down completely randomly.

Pair Corralation between WinVest Acquisition and Brookfield Business

Given the investment horizon of 90 days WinVest Acquisition Corp is expected to generate 0.77 times more return on investment than Brookfield Business. However, WinVest Acquisition Corp is 1.3 times less risky than Brookfield Business. It trades about 0.1 of its potential returns per unit of risk. Brookfield Business Corp is currently generating about -0.24 per unit of risk. If you would invest  1,123  in WinVest Acquisition Corp on March 11, 2024 and sell it today you would earn a total of  27.00  from holding WinVest Acquisition Corp or generate 2.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

WinVest Acquisition Corp  vs.  Brookfield Business Corp

WinVest Acquisition Corp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in WinVest Acquisition Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, WinVest Acquisition is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Brookfield Business Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brookfield Business Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in July 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with WinVest Acquisition and Brookfield Business

The main advantage of trading using opposite WinVest Acquisition and Brookfield Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WinVest 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 WinVest Acquisition Corp and Brookfield Business Corp 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.