Correlation Between Brookfield Wealth and Hamilton Insurance

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

Diversification Opportunities for Brookfield Wealth and Hamilton Insurance

0.31

Correlation Coefficient

Brookfield Wealth  Hamilton Insurance

Weak diversification

The 3 months correlation between Brookfield and Hamilton is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Wealth Solutions and Hamilton Insurance Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamilton Insurance Group, 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 Hamilton Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hamilton Insurance Group, has no effect on the direction of Brookfield Wealth i.e., Brookfield Wealth and Hamilton Insurance go up and down completely randomly.

Pair Corralation between Brookfield Wealth and Hamilton Insurance

Considering the 90-day investment horizon Brookfield Wealth Solutions is expected to under-perform the Hamilton Insurance. In addition to that, Brookfield Wealth is 1.21 times more volatile than Hamilton Insurance Group,. It trades about -0.11 of its total potential returns per unit of risk. Hamilton Insurance Group, is currently generating about 0.04 per unit of volatility. If you would invest  1,900  in Hamilton Insurance Group, on September 23, 2024 and sell it today you would earn a total of  17.00  from holding Hamilton Insurance Group, or generate 0.89% return on investment over 90 days.

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

Brookfield Wealth Solutions  vs.  Hamilton Insurance Group,

Brookfield Wealth

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Brookfield Wealth Solutions are ranked lower than 5 (%) 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 January 2025.

Hamilton Insurance Group,

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hamilton Insurance Group, are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Hamilton Insurance is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Brookfield Wealth and Hamilton Insurance

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

The idea behind Brookfield Wealth Solutions and Hamilton Insurance Group, 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.