Correlation Between AES and Brookfield Asset

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

By analyzing existing cross correlation between The AES and Brookfield Asset Management, you can compare the effects of market volatilities on AES 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 AES with a short position of Brookfield Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of AES and Brookfield Asset.

Diversification Opportunities for AES and Brookfield Asset

0.83

Correlation Coefficient

AES  Brookfield Asset

Very poor diversification

The 3 months correlation between AES and Brookfield is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding The AES 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 AES 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 The AES 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 AES i.e., AES and Brookfield Asset go up and down completely randomly.

Pair Corralation between AES and Brookfield Asset

Considering the 90-day investment horizon The AES is expected to generate 2.07 times more return on investment than Brookfield Asset. However, AES is 2.07 times more volatile than Brookfield Asset Management. It trades about 0.17 of its potential returns per unit of risk. Brookfield Asset Management is currently generating about 0.06 per unit of risk. If you would invest  950.00  in The AES on May 22, 2025 and sell it today you would earn a total of  380.00  from holding The AES or generate 40.0% return on investment over 90 days.

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

The AES  vs.  Brookfield Asset Management

AES

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in The AES are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical and fundamental indicators, AES unveiled solid returns over the last few months and may actually be approaching a breakup point.

Brookfield Asset Man

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Brookfield Asset Management are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Brookfield Asset may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with AES and Brookfield Asset

The main advantage of trading using opposite AES and Brookfield Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AES 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.

The idea behind The AES and Brookfield Asset Management 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.