Correlation Between Brookfield Asset and Electra Battery

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

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

Diversification Opportunities for Brookfield Asset and Electra Battery

0.57

Correlation Coefficient

Brookfield Asset  Electra Battery

Very weak diversification

The 3 months correlation between Brookfield and Electra is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Asset Management and Electra Battery Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electra Battery Materials and Brookfield Asset 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 Asset Management are associated (or correlated) with Electra Battery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electra Battery Materials has no effect on the direction of Brookfield Asset i.e., Brookfield Asset and Electra Battery go up and down completely randomly.

Pair Corralation between Brookfield Asset and Electra Battery

Assuming the 90 days trading horizon Brookfield Asset Management is expected to generate 0.54 times more return on investment than Electra Battery. However, Brookfield Asset Management is 1.84 times less risky than Electra Battery. It trades about 0.1 of its potential returns per unit of risk. Electra Battery Materials is currently generating about 0.03 per unit of risk. If you would invest  7,513  in Brookfield Asset Management on May 6, 2025 and sell it today you would earn a total of  739.00  from holding Brookfield Asset Management or generate 9.84% return on investment over 90 days.

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

Brookfield Asset Management  vs.  Electra Battery Materials

Brookfield Asset Man

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Brookfield Asset Management are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very weak primary indicators, Brookfield Asset may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Electra Battery Materials

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Electra Battery Materials are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable fundamental drivers, Electra Battery is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Brookfield Asset and Electra Battery

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

The idea behind Brookfield Asset Management and Electra Battery Materials 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.