Correlation Between Apple and BROOKFIELD REINSURANCE
Can any of the company-specific risk be diversified away by investing in both Apple and BROOKFIELD REINSURANCE 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 Apple and BROOKFIELD REINSURANCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc CDR and BROOKFIELD REINSURANCE LTD, you can compare the effects of market volatilities on Apple and BROOKFIELD REINSURANCE 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 Apple with a short position of BROOKFIELD REINSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and BROOKFIELD REINSURANCE.
Diversification Opportunities for Apple and BROOKFIELD REINSURANCE
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Apple and BROOKFIELD is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc CDR and BROOKFIELD REINSURANCE LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BROOKFIELD REINSURANCE and Apple 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 Apple Inc CDR are associated (or correlated) with BROOKFIELD REINSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BROOKFIELD REINSURANCE has no effect on the direction of Apple i.e., Apple and BROOKFIELD REINSURANCE go up and down completely randomly.
Pair Corralation between Apple and BROOKFIELD REINSURANCE
Assuming the 90 days trading horizon Apple is expected to generate 1.9 times less return on investment than BROOKFIELD REINSURANCE. But when comparing it to its historical volatility, Apple Inc CDR is 1.08 times less risky than BROOKFIELD REINSURANCE. It trades about 0.11 of its potential returns per unit of risk. BROOKFIELD REINSURANCE LTD is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 5,684 in BROOKFIELD REINSURANCE LTD on September 5, 2024 and sell it today you would earn a total of 2,289 from holding BROOKFIELD REINSURANCE LTD or generate 40.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 85.6% |
| Values | Daily Returns |
Apple Inc CDR vs. BROOKFIELD REINSURANCE LTD
Performance |
| Timeline |
| Apple Inc CDR |
| BROOKFIELD REINSURANCE |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Strong
Apple and BROOKFIELD REINSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and BROOKFIELD REINSURANCE
The main advantage of trading using opposite Apple and BROOKFIELD REINSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, BROOKFIELD REINSURANCE 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 REINSURANCE will offset losses from the drop in BROOKFIELD REINSURANCE's long position.| Apple vs. Rogers Communications | Apple vs. Maple Leaf Foods | Apple vs. Questor Technology | Apple vs. Nicola Mining |
| BROOKFIELD REINSURANCE vs. Apple Inc CDR | BROOKFIELD REINSURANCE vs. NVIDIA CDR | BROOKFIELD REINSURANCE vs. Microsoft Corp CDR | BROOKFIELD REINSURANCE vs. Amazon CDR |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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