Correlation Between Brookfield Infrastructure and Nova Leap
Can any of the company-specific risk be diversified away by investing in both Brookfield Infrastructure and Nova Leap 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 Nova Leap 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 Nova Leap Health, you can compare the effects of market volatilities on Brookfield Infrastructure and Nova Leap 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 Nova Leap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Infrastructure and Nova Leap.
Diversification Opportunities for Brookfield Infrastructure and Nova Leap
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Brookfield and Nova is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Infrastructure Part and Nova Leap Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nova Leap Health 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 Nova Leap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nova Leap Health has no effect on the direction of Brookfield Infrastructure i.e., Brookfield Infrastructure and Nova Leap go up and down completely randomly.
Pair Corralation between Brookfield Infrastructure and Nova Leap
Assuming the 90 days trading horizon Brookfield Infrastructure Partners is expected to generate 0.21 times more return on investment than Nova Leap. However, Brookfield Infrastructure Partners is 4.74 times less risky than Nova Leap. It trades about -0.17 of its potential returns per unit of risk. Nova Leap Health is currently generating about -0.18 per unit of risk. If you would invest 2,551 in Brookfield Infrastructure Partners on October 25, 2024 and sell it today you would lose (51.00) from holding Brookfield Infrastructure Partners or give up 2.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brookfield Infrastructure Part vs. Nova Leap Health
Performance |
| Timeline |
| Brookfield Infrastructure |
| Nova Leap Health |
Brookfield Infrastructure and Nova Leap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Infrastructure and Nova Leap
The main advantage of trading using opposite Brookfield Infrastructure and Nova Leap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Infrastructure position performs unexpectedly, Nova Leap 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 Nova Leap will offset losses from the drop in Nova Leap's long position.The idea behind Brookfield Infrastructure Partners and Nova Leap Health 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.
| Nova Leap vs. BMO Aggregate Bond | Nova Leap vs. iShares Canadian HYBrid | Nova Leap vs. Brompton European Dividend | Nova Leap vs. Solar Alliance Energy |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |