Correlation Between Brookfield Infrastructure and Canadian Utilities
Can any of the company-specific risk be diversified away by investing in both Brookfield Infrastructure and Canadian Utilities 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 Infrastructure and Canadian Utilities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brookfield Infrastructure Partners and Canadian Utilities Ltd, you can compare the effects of market volatilities on Brookfield Infrastructure and Canadian Utilities 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 Infrastructure with a short position of Canadian Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Infrastructure and Canadian Utilities.
Diversification Opportunities for Brookfield Infrastructure and Canadian Utilities
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Brookfield and Canadian is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Infrastructure Part and Canadian Utilities Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Utilities and Brookfield Infrastructure 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 Infrastructure Partners are associated (or correlated) with Canadian Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Utilities has no effect on the direction of Brookfield Infrastructure i.e., Brookfield Infrastructure and Canadian Utilities go up and down completely randomly.
Pair Corralation between Brookfield Infrastructure and Canadian Utilities
Assuming the 90 days trading horizon Brookfield Infrastructure Partners is expected to generate 0.94 times more return on investment than Canadian Utilities. However, Brookfield Infrastructure Partners is 1.07 times less risky than Canadian Utilities. It trades about 0.36 of its potential returns per unit of risk. Canadian Utilities Ltd is currently generating about 0.07 per unit of risk. If you would invest 2,155 in Brookfield Infrastructure Partners on September 2, 2024 and sell it today you would earn a total of 198.00 from holding Brookfield Infrastructure Partners or generate 9.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brookfield Infrastructure Part vs. Canadian Utilities Ltd
Performance |
| Timeline |
| Brookfield Infrastructure |
| Canadian Utilities |
Brookfield Infrastructure and Canadian Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Infrastructure and Canadian Utilities
The main advantage of trading using opposite Brookfield Infrastructure and Canadian Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Infrastructure position performs unexpectedly, Canadian Utilities 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 Canadian Utilities will offset losses from the drop in Canadian Utilities' long position.| Brookfield Infrastructure vs. Royal Canadian Mint | Brookfield Infrastructure vs. Cymbria | Brookfield Infrastructure vs. BMO Aggregate Bond | Brookfield Infrastructure vs. iShares Canadian HYBrid |
| Canadian Utilities vs. Talon Metals Corp | Canadian Utilities vs. Maple Peak Investments | Canadian Utilities vs. Canaf Investments | Canadian Utilities vs. Element Fleet Management |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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