Correlation Between Brookfield Real and ARMOUR Residential
Can any of the company-specific risk be diversified away by investing in both Brookfield Real and ARMOUR Residential 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 Real and ARMOUR Residential into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brookfield Real Assets and ARMOUR Residential REIT, you can compare the effects of market volatilities on Brookfield Real and ARMOUR Residential 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 Real with a short position of ARMOUR Residential. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Real and ARMOUR Residential.
Diversification Opportunities for Brookfield Real and ARMOUR Residential
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Brookfield and ARMOUR is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Real Assets and ARMOUR Residential REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARMOUR Residential REIT and Brookfield Real 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 Real Assets are associated (or correlated) with ARMOUR Residential. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARMOUR Residential REIT has no effect on the direction of Brookfield Real i.e., Brookfield Real and ARMOUR Residential go up and down completely randomly.
Pair Corralation between Brookfield Real and ARMOUR Residential
Allowing for the 90-day total investment horizon Brookfield Real Assets is expected to generate 0.32 times more return on investment than ARMOUR Residential. However, Brookfield Real Assets is 3.11 times less risky than ARMOUR Residential. It trades about 0.25 of its potential returns per unit of risk. ARMOUR Residential REIT is currently generating about 0.0 per unit of risk. If you would invest 1,264 in Brookfield Real Assets on June 9, 2025 and sell it today you would earn a total of 92.00 from holding Brookfield Real Assets or generate 7.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brookfield Real Assets vs. ARMOUR Residential REIT
Performance |
| Timeline |
| Brookfield Real Assets |
| ARMOUR Residential REIT |
Brookfield Real and ARMOUR Residential Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Real and ARMOUR Residential
The main advantage of trading using opposite Brookfield Real and ARMOUR Residential positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Real position performs unexpectedly, ARMOUR Residential 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 ARMOUR Residential will offset losses from the drop in ARMOUR Residential's long position.| Brookfield Real vs. Pimco Dynamic Income | Brookfield Real vs. Pimco Corporate Income | Brookfield Real vs. Cornerstone Strategic Value | Brookfield Real vs. Cornerstone Strategic Return |
| ARMOUR Residential vs. Dynex Capital | ARMOUR Residential vs. Ellington Residential Mortgage | ARMOUR Residential vs. Oxford Lane Capital | ARMOUR Residential vs. Cornerstone Strategic Value |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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