Correlation Between Citizens and Brookfield Wealth
Can any of the company-specific risk be diversified away by investing in both Citizens and Brookfield Wealth 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 Citizens and Brookfield Wealth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citizens and Brookfield Wealth Solutions, you can compare the effects of market volatilities on Citizens and Brookfield Wealth 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 Citizens with a short position of Brookfield Wealth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens and Brookfield Wealth.
Diversification Opportunities for Citizens and Brookfield Wealth
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Citizens and Brookfield is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Citizens and Brookfield Wealth Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Wealth and Citizens 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 Citizens are associated (or correlated) with Brookfield Wealth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield Wealth has no effect on the direction of Citizens i.e., Citizens and Brookfield Wealth go up and down completely randomly.
Pair Corralation between Citizens and Brookfield Wealth
Considering the 90-day investment horizon Citizens is expected to generate 1.97 times more return on investment than Brookfield Wealth. However, Citizens is 1.97 times more volatile than Brookfield Wealth Solutions. It trades about 0.09 of its potential returns per unit of risk. Brookfield Wealth Solutions is currently generating about -0.05 per unit of risk. If you would invest 445.00 in Citizens on November 27, 2024 and sell it today you would earn a total of 73.00 from holding Citizens or generate 16.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citizens vs. Brookfield Wealth Solutions
Performance |
| Timeline |
| Citizens |
| Brookfield Wealth |
Citizens and Brookfield Wealth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens and Brookfield Wealth
The main advantage of trading using opposite Citizens and Brookfield Wealth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens position performs unexpectedly, Brookfield Wealth 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 Brookfield Wealth will offset losses from the drop in Brookfield Wealth's long position.| Citizens vs. CNO Financial Group | Citizens vs. Brighthouse Financial | Citizens vs. FG Annuities Life | Citizens vs. Prudential PLC ADR |
| Brookfield Wealth vs. Cedar Realty Trust | Brookfield Wealth vs. Mangazeya Mining | Brookfield Wealth vs. Simon Property Group | Brookfield Wealth vs. Marimaca Copper Corp |
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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