Correlation Between Premium Income and Brookfield Wealth

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

By analyzing existing cross correlation between Premium Income and Brookfield Wealth Solutions, you can compare the effects of market volatilities on Premium Income and Brookfield Wealth 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 Premium Income with a short position of Brookfield Wealth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Premium Income and Brookfield Wealth.

Diversification Opportunities for Premium Income and Brookfield Wealth

0.89

Correlation Coefficient

Premium Income  Brookfield Wealth

Very poor diversification

The 3 months correlation between Premium and Brookfield is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Premium Income and Brookfield Wealth Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Wealth and Premium Income 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 Premium Income are associated (or correlated) with Brookfield Wealth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield Wealth has no effect on the direction of Premium Income i.e., Premium Income and Brookfield Wealth go up and down completely randomly.

Pair Corralation between Premium Income and Brookfield Wealth

Assuming the 90 days trading horizon Premium Income is expected to generate 0.82 times more return on investment than Brookfield Wealth. However, Premium Income is 1.22 times less risky than Brookfield Wealth. It trades about 0.46 of its potential returns per unit of risk. Brookfield Wealth Solutions is currently generating about 0.21 per unit of risk. If you would invest  456.00  in Premium Income on April 24, 2025 and sell it today you would earn a total of  205.00  from holding Premium Income or generate 44.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.41%
Values	Daily Returns

Premium Income  vs.  Brookfield Wealth Solutions

Premium Income

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Premium Income are ranked lower than 36 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Premium Income unveiled solid returns over the last few months and may actually be approaching a breakup point.

Brookfield Wealth

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Brookfield Wealth Solutions are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Brookfield Wealth displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Premium Income and Brookfield Wealth

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

The idea behind Premium Income and Brookfield Wealth Solutions 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.