Correlation Between BROOKFIELD REINSURANCE and Apple
Can any of the company-specific risk be diversified away by investing in both BROOKFIELD REINSURANCE and Apple 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 REINSURANCE and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BROOKFIELD REINSURANCE LTD and Apple Inc CDR, you can compare the effects of market volatilities on BROOKFIELD REINSURANCE and Apple 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 REINSURANCE with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of BROOKFIELD REINSURANCE and Apple.
Diversification Opportunities for BROOKFIELD REINSURANCE and Apple
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BROOKFIELD and Apple is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding BROOKFIELD REINSURANCE LTD and Apple Inc CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc CDR and BROOKFIELD REINSURANCE 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 REINSURANCE LTD are associated (or correlated) with Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc CDR has no effect on the direction of BROOKFIELD REINSURANCE i.e., BROOKFIELD REINSURANCE and Apple go up and down completely randomly.
Pair Corralation between BROOKFIELD REINSURANCE and Apple
Assuming the 90 days trading horizon BROOKFIELD REINSURANCE LTD is expected to generate 1.87 times more return on investment than Apple. However, BROOKFIELD REINSURANCE is 1.87 times more volatile than Apple Inc CDR. It trades about 0.79 of its potential returns per unit of risk. Apple Inc CDR is currently generating about 0.47 per unit of risk. If you would invest 7,498 in BROOKFIELD REINSURANCE LTD on September 5, 2024 and sell it today you would earn a total of 475.00 from holding BROOKFIELD REINSURANCE LTD or generate 6.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 21.74% |
| Values | Daily Returns |
BROOKFIELD REINSURANCE LTD vs. Apple Inc CDR
Performance |
| Timeline |
| BROOKFIELD REINSURANCE |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Strong
| Apple Inc CDR |
BROOKFIELD REINSURANCE and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BROOKFIELD REINSURANCE and Apple
The main advantage of trading using opposite BROOKFIELD REINSURANCE and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BROOKFIELD REINSURANCE position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| BROOKFIELD REINSURANCE vs. Apple Inc CDR | BROOKFIELD REINSURANCE vs. NVIDIA CDR | BROOKFIELD REINSURANCE vs. Microsoft Corp CDR | BROOKFIELD REINSURANCE vs. Amazon CDR |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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