Correlation Between Niagara Mohawk and Brookfield Asset

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

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

Diversification Opportunities for Niagara Mohawk and Brookfield Asset

0.91

Correlation Coefficient

Niagara Mohawk  Brookfield Asset

Almost no diversification

The 3 months correlation between Niagara and Brookfield is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Niagara Mohawk Power 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 Niagara Mohawk 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 Niagara Mohawk Power 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 Niagara Mohawk i.e., Niagara Mohawk and Brookfield Asset go up and down completely randomly.

Pair Corralation between Niagara Mohawk and Brookfield Asset

If you would invest  6,200  in Niagara Mohawk Power on July 24, 2024 and sell it today you would earn a total of  0.00  from holding Niagara Mohawk Power or generate 0.0% return on investment over 90 days.

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

Niagara Mohawk Power  vs.  Brookfield Asset Management

Niagara Mohawk Power

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Niagara Mohawk Power are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Niagara Mohawk may actually be approaching a critical reversion point that can send shares even higher in November 2024.

Brookfield Asset Man

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Brookfield Asset Management are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Brookfield Asset is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Niagara Mohawk and Brookfield Asset

The main advantage of trading using opposite Niagara Mohawk and Brookfield Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Niagara Mohawk 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 Niagara Mohawk Power 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.