Correlation Between Brompton Lifeco and MINT Income

Can any of the company-specific risk be diversified away by investing in both Brompton Lifeco and MINT Income 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 Brompton Lifeco and MINT Income into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Brompton Lifeco Split and MINT Income Fund, you can compare the effects of market volatilities on Brompton Lifeco and MINT Income 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 Brompton Lifeco with a short position of MINT Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brompton Lifeco and MINT Income.

Diversification Opportunities for Brompton Lifeco and MINT Income

-0.26

Correlation Coefficient

Brompton Lifeco  MINT Income

Very good diversification

The 3 months correlation between Brompton and MINT is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Brompton Lifeco Split and MINT Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MINT Income Fund and Brompton Lifeco 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 Brompton Lifeco Split are associated (or correlated) with MINT Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MINT Income Fund has no effect on the direction of Brompton Lifeco i.e., Brompton Lifeco and MINT Income go up and down completely randomly.

Pair Corralation between Brompton Lifeco and MINT Income

Assuming the 90 days trading horizon Brompton Lifeco Split is expected to under-perform the MINT Income. In addition to that, Brompton Lifeco is 2.3 times more volatile than MINT Income Fund. It trades about -0.07 of its total potential returns per unit of risk. MINT Income Fund is currently generating about 0.0 per unit of volatility. If you would invest  751.00  in MINT Income Fund on December 1, 2024 and sell it today you would lose (2.00) from holding MINT Income Fund or give up 0.27% of portfolio value over 90 days.

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

Brompton Lifeco Split  vs.  MINT Income Fund

Brompton Lifeco Split

Risk-Adjusted Performance

Very Weak

Over the last 90 days Brompton Lifeco Split has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

MINT Income Fund

Risk-Adjusted Performance

Very Weak

Over the last 90 days MINT Income Fund has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, MINT Income is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Brompton Lifeco and MINT Income

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

The idea behind Brompton Lifeco Split and MINT Income Fund 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.