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

-0.05

Correlation Coefficient

Brookfield Wealth  Maiden Holdings

Good diversification

The 3 months correlation between Brookfield and Maiden is -0.05. 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 under-perform the Maiden Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Brookfield Wealth Solutions is 4.3 times less risky than Maiden Holdings. The stock trades about -0.19 of its potential returns per unit of risk. The Maiden Holdings is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  101.00  in Maiden Holdings on December 2, 2024 and sell it today you would lose (4.00) from holding Maiden Holdings or give up 3.96% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
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 comparatively stable basic indicators, Brookfield Wealth is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the 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.

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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.