Correlation Between Precious Metals and Brookfield Asset

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

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

Diversification Opportunities for Precious Metals and Brookfield Asset

0.3

Correlation Coefficient

Precious Metals  Brookfield Asset

Weak diversification

The 3 months correlation between Precious and Brookfield is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Precious Metals And 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 Precious Metals 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 Precious Metals And 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 Precious Metals i.e., Precious Metals and Brookfield Asset go up and down completely randomly.

Pair Corralation between Precious Metals and Brookfield Asset

Assuming the 90 days trading horizon Precious Metals is expected to generate 1.22 times less return on investment than Brookfield Asset. But when comparing it to its historical volatility, Precious Metals And is 1.09 times less risky than Brookfield Asset. It trades about 0.12 of its potential returns per unit of risk. Brookfield Asset Management is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  7,197  in Brookfield Asset Management on April 24, 2025 and sell it today you would earn a total of  1,068  from holding Brookfield Asset Management or generate 14.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Precious Metals And  vs.  Brookfield Asset Management

Precious Metals And

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Precious Metals And are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Precious Metals may actually be approaching a critical reversion point that can send shares even higher in August 2025.

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 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating primary indicators, Brookfield Asset displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Precious Metals and Brookfield Asset

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

Check out your portfolio center.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.