Correlation Between Brookfield Wealth and Maiden Holdings

Can any of the company-specific risk be diversified away by investing in both Brookfield Wealth and Maiden Holdings 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 Maiden Holdings 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 Maiden Holdings, you can compare the effects of market volatilities on Brookfield Wealth and Maiden Holdings 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 Maiden Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Wealth and Maiden Holdings.

Diversification Opportunities for Brookfield Wealth and Maiden Holdings

0.38

Correlation Coefficient

Brookfield Wealth  Maiden Holdings

Weak diversification

The 3 months correlation between Brookfield and Maiden is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Wealth Solutions and Maiden Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maiden Holdings 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 Maiden Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maiden Holdings has no effect on the direction of Brookfield Wealth i.e., Brookfield Wealth and Maiden Holdings go up and down completely randomly.

Pair Corralation between Brookfield Wealth and Maiden Holdings

Considering the 90-day investment horizon Brookfield Wealth Solutions is expected to generate 0.25 times more return on investment than Maiden Holdings. However, Brookfield Wealth Solutions is 3.97 times less risky than Maiden Holdings. It trades about -0.07 of its potential returns per unit of risk. Maiden Holdings is currently generating about -0.09 per unit of risk. If you would invest  5,724  in Brookfield Wealth Solutions on December 29, 2024 and sell it today you would lose (548.00) from holding Brookfield Wealth Solutions or give up 9.57% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Brookfield Wealth Solutions  vs.  Maiden Holdings

Brookfield Wealth

Risk-Adjusted Performance

Very Weak

Over the last 90 days Brookfield Wealth Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Maiden Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Maiden Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's essential indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Brookfield Wealth and Maiden Holdings

The main advantage of trading using opposite Brookfield Wealth and Maiden Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Wealth position performs unexpectedly, Maiden Holdings 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 Maiden Holdings will offset losses from the drop in Maiden Holdings' long position.

The idea behind Brookfield Wealth Solutions and Maiden Holdings 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.

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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.