Correlation Between BROOKFIELD REINSURANCE and IShares Canadian
Can any of the company-specific risk be diversified away by investing in both BROOKFIELD REINSURANCE and IShares Canadian 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 IShares Canadian 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 iShares Canadian HYBrid, you can compare the effects of market volatilities on BROOKFIELD REINSURANCE and IShares Canadian 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 IShares Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of BROOKFIELD REINSURANCE and IShares Canadian.
Diversification Opportunities for BROOKFIELD REINSURANCE and IShares Canadian
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BROOKFIELD and IShares is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding BROOKFIELD REINSURANCE LTD and iShares Canadian HYBrid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Canadian HYBrid 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 IShares Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Canadian HYBrid has no effect on the direction of BROOKFIELD REINSURANCE i.e., BROOKFIELD REINSURANCE and IShares Canadian go up and down completely randomly.
Pair Corralation between BROOKFIELD REINSURANCE and IShares Canadian
Assuming the 90 days trading horizon BROOKFIELD REINSURANCE LTD is expected to generate 4.38 times more return on investment than IShares Canadian. However, BROOKFIELD REINSURANCE is 4.38 times more volatile than iShares Canadian HYBrid. It trades about 0.08 of its potential returns per unit of risk. iShares Canadian HYBrid is currently generating about 0.08 per unit of risk. If you would invest 4,551 in BROOKFIELD REINSURANCE LTD on September 2, 2024 and sell it today you would earn a total of 3,422 from holding BROOKFIELD REINSURANCE LTD or generate 75.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.77% |
| Values | Daily Returns |
BROOKFIELD REINSURANCE LTD vs. iShares Canadian HYBrid
Performance |
| Timeline |
| BROOKFIELD REINSURANCE |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| iShares Canadian HYBrid |
BROOKFIELD REINSURANCE and IShares Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BROOKFIELD REINSURANCE and IShares Canadian
The main advantage of trading using opposite BROOKFIELD REINSURANCE and IShares Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BROOKFIELD REINSURANCE position performs unexpectedly, IShares Canadian 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 IShares Canadian will offset losses from the drop in IShares Canadian's long position.The idea behind BROOKFIELD REINSURANCE LTD and iShares Canadian HYBrid 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.
| IShares Canadian vs. iShares IG Corporate | IShares Canadian vs. iShares High Yield | IShares Canadian vs. iShares Floating Rate | IShares Canadian vs. iShares JP Morgan |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |