Correlation Between Brookfield Reinsurance and SiriusPoint
Can any of the company-specific risk be diversified away by investing in both Brookfield Reinsurance and SiriusPoint 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 SiriusPoint into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brookfield Reinsurance and SiriusPoint, you can compare the effects of market volatilities on Brookfield Reinsurance and SiriusPoint 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 SiriusPoint. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Reinsurance and SiriusPoint.
Diversification Opportunities for Brookfield Reinsurance and SiriusPoint
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Brookfield and SiriusPoint is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Reinsurance and SiriusPoint in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SiriusPoint 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 are associated (or correlated) with SiriusPoint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SiriusPoint has no effect on the direction of Brookfield Reinsurance i.e., Brookfield Reinsurance and SiriusPoint go up and down completely randomly.
Pair Corralation between Brookfield Reinsurance and SiriusPoint
Given the investment horizon of 90 days Brookfield Reinsurance is expected to generate 2.34 times more return on investment than SiriusPoint. However, Brookfield Reinsurance is 2.34 times more volatile than SiriusPoint. It trades about 0.04 of its potential returns per unit of risk. SiriusPoint is currently generating about 0.06 per unit of risk. If you would invest 3,743 in Brookfield Reinsurance on August 27, 2024 and sell it today you would earn a total of 969.00 from holding Brookfield Reinsurance or generate 25.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 88.71% |
| Values | Daily Returns |
Brookfield Reinsurance vs. SiriusPoint
Performance |
| Timeline |
| Brookfield Reinsurance |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| SiriusPoint |
Brookfield Reinsurance and SiriusPoint Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Reinsurance and SiriusPoint
The main advantage of trading using opposite Brookfield Reinsurance and SiriusPoint positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Reinsurance position performs unexpectedly, SiriusPoint 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 SiriusPoint will offset losses from the drop in SiriusPoint's long position.| Brookfield Reinsurance vs. Maiden Holdings | Brookfield Reinsurance vs. Renaissancere Holdings | Brookfield Reinsurance vs. Greenlight Capital Re | Brookfield Reinsurance vs. Reinsurance Group of |
| SiriusPoint vs. RLJ Lodging Trust | SiriusPoint vs. Argo Group International | SiriusPoint vs. New York Mortgage | SiriusPoint vs. Aquagold International |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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