Correlation Between Brookfield Wealth and MetLife Preferred
Can any of the company-specific risk be diversified away by investing in both Brookfield Wealth and MetLife Preferred 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 Wealth and MetLife Preferred into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brookfield Wealth Solutions and MetLife Preferred Stock, you can compare the effects of market volatilities on Brookfield Wealth and MetLife Preferred 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 Wealth with a short position of MetLife Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Wealth and MetLife Preferred.
Diversification Opportunities for Brookfield Wealth and MetLife Preferred
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Brookfield and MetLife is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Wealth Solutions and MetLife Preferred Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetLife Preferred Stock and Brookfield Wealth 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 Wealth Solutions are associated (or correlated) with MetLife Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MetLife Preferred Stock has no effect on the direction of Brookfield Wealth i.e., Brookfield Wealth and MetLife Preferred go up and down completely randomly.
Pair Corralation between Brookfield Wealth and MetLife Preferred
Considering the 90-day investment horizon Brookfield Wealth Solutions is expected to generate 2.44 times more return on investment than MetLife Preferred. However, Brookfield Wealth is 2.44 times more volatile than MetLife Preferred Stock. It trades about 0.07 of its potential returns per unit of risk. MetLife Preferred Stock is currently generating about 0.06 per unit of risk. If you would invest 3,620 in Brookfield Wealth Solutions on September 1, 2024 and sell it today you would earn a total of 2,519 from holding Brookfield Wealth Solutions or generate 69.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brookfield Wealth Solutions vs. MetLife Preferred Stock
Performance |
| Timeline |
| Brookfield Wealth |
| MetLife Preferred Stock |
Brookfield Wealth and MetLife Preferred Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Wealth and MetLife Preferred
The main advantage of trading using opposite Brookfield Wealth and MetLife Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Wealth position performs unexpectedly, MetLife Preferred 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 MetLife Preferred will offset losses from the drop in MetLife Preferred's long position.| Brookfield Wealth vs. Planet Fitness | Brookfield Wealth vs. MI Homes | Brookfield Wealth vs. Life Time Group | Brookfield Wealth vs. Franklin Street Properties |
| MetLife Preferred vs. Brighthouse Financial | MetLife Preferred vs. Brighthouse Financial | MetLife Preferred vs. MetLife Preferred Stock | MetLife Preferred vs. Brighthouse Financial |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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