Correlation Between Brookfield Wealth and Siriuspoint

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

Diversification Opportunities for Brookfield Wealth and Siriuspoint

0.82

Correlation Coefficient

Brookfield Wealth  Siriuspoint

Very poor diversification

The 3 months correlation between Brookfield and Siriuspoint is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Wealth Solutions and Siriuspoint in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siriuspoint 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 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 Wealth i.e., Brookfield Wealth and Siriuspoint go up and down completely randomly.

Pair Corralation between Brookfield Wealth and Siriuspoint

Considering the 90-day investment horizon Brookfield Wealth is expected to generate 1.13 times less return on investment than Siriuspoint. But when comparing it to its historical volatility, Brookfield Wealth Solutions is 1.15 times less risky than Siriuspoint. It trades about 0.1 of its potential returns per unit of risk. Siriuspoint is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  717.00  in Siriuspoint on October 5, 2024 and sell it today you would earn a total of  857.00  from holding Siriuspoint or generate 119.53% return on investment over 90 days.

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

Brookfield Wealth Solutions  vs.  Siriuspoint

Brookfield Wealth

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Brookfield Wealth Solutions are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Brookfield Wealth may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Siriuspoint

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Siriuspoint are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Siriuspoint unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Brookfield Wealth and Siriuspoint

The main advantage of trading using opposite Brookfield Wealth and Siriuspoint positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Wealth 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.

The idea behind Brookfield Wealth Solutions and Siriuspoint 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.