Correlation Between BROOKFIELD REINSURANCE and Aurora Solar
Can any of the company-specific risk be diversified away by investing in both BROOKFIELD REINSURANCE and Aurora Solar 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 Aurora Solar 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 Aurora Solar Technologies, you can compare the effects of market volatilities on BROOKFIELD REINSURANCE and Aurora Solar 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 Aurora Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of BROOKFIELD REINSURANCE and Aurora Solar.
Diversification Opportunities for BROOKFIELD REINSURANCE and Aurora Solar
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BROOKFIELD and Aurora is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding BROOKFIELD REINSURANCE LTD and Aurora Solar Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurora Solar Technologies 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 Aurora Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurora Solar Technologies has no effect on the direction of BROOKFIELD REINSURANCE i.e., BROOKFIELD REINSURANCE and Aurora Solar go up and down completely randomly.
Pair Corralation between BROOKFIELD REINSURANCE and Aurora Solar
Assuming the 90 days trading horizon BROOKFIELD REINSURANCE LTD is expected to generate 0.2 times more return on investment than Aurora Solar. However, BROOKFIELD REINSURANCE LTD is 5.04 times less risky than Aurora Solar. It trades about 0.32 of its potential returns per unit of risk. Aurora Solar Technologies is currently generating about -0.07 per unit of risk. If you would invest 7,589 in BROOKFIELD REINSURANCE LTD on August 27, 2024 and sell it today you would earn a total of 384.00 from holding BROOKFIELD REINSURANCE LTD or generate 5.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 47.62% |
| Values | Daily Returns |
BROOKFIELD REINSURANCE LTD vs. Aurora Solar Technologies
Performance |
| Timeline |
| BROOKFIELD REINSURANCE |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| Aurora Solar Technologies |
BROOKFIELD REINSURANCE and Aurora Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BROOKFIELD REINSURANCE and Aurora Solar
The main advantage of trading using opposite BROOKFIELD REINSURANCE and Aurora Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BROOKFIELD REINSURANCE position performs unexpectedly, Aurora Solar 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 Aurora Solar will offset losses from the drop in Aurora Solar's long position.| BROOKFIELD REINSURANCE vs. Brookfield Investments | BROOKFIELD REINSURANCE vs. Perseus Mining | BROOKFIELD REINSURANCE vs. CNJ Capital Investments | BROOKFIELD REINSURANCE vs. Canadian General Investments |
| Aurora Solar vs. Solar Alliance Energy | Aurora Solar vs. Lite Access Technologies | Aurora Solar vs. Braille Energy Systems |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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