Correlation Between Alimentation Couchen and Brookfield Asset

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

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

Diversification Opportunities for Alimentation Couchen and Brookfield Asset

-0.17

Correlation Coefficient

Alimentation Couchen  Brookfield Asset

Good diversification

The 3 months correlation between Alimentation and Brookfield is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Alimentation Couchen Tard 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 Alimentation Couchen 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 Alimentation Couchen Tard 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 Alimentation Couchen i.e., Alimentation Couchen and Brookfield Asset go up and down completely randomly.

Pair Corralation between Alimentation Couchen and Brookfield Asset

Assuming the 90 days trading horizon Alimentation Couchen is expected to generate 3.7 times less return on investment than Brookfield Asset. In addition to that, Alimentation Couchen is 1.01 times more volatile than Brookfield Asset Management. It trades about 0.05 of its total potential returns per unit of risk. Brookfield Asset Management is currently generating about 0.18 per unit of volatility. If you would invest  6,780  in Brookfield Asset Management on April 22, 2025 and sell it today you would earn a total of  1,456  from holding Brookfield Asset Management or generate 21.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Alimentation Couchen Tard  vs.  Brookfield Asset Management

Alimentation Couchen Tard

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Alimentation Couchen Tard are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Alimentation Couchen is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Brookfield Asset Man

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Brookfield Asset Management are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very weak primary indicators, Brookfield Asset displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alimentation Couchen and Brookfield Asset

The main advantage of trading using opposite Alimentation Couchen and Brookfield Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alimentation Couchen 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 Alimentation Couchen Tard 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.