Correlation Between Brookfield Infrastructure and Onex Corp
Can any of the company-specific risk be diversified away by investing in both Brookfield Infrastructure and Onex Corp 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 Onex Corp 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 Onex Corp, you can compare the effects of market volatilities on Brookfield Infrastructure and Onex Corp 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 Onex Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Infrastructure and Onex Corp.
Diversification Opportunities for Brookfield Infrastructure and Onex Corp
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Brookfield and Onex is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Infrastructure Part and Onex Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Onex Corp 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 Onex Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Onex Corp has no effect on the direction of Brookfield Infrastructure i.e., Brookfield Infrastructure and Onex Corp go up and down completely randomly.
Pair Corralation between Brookfield Infrastructure and Onex Corp
Assuming the 90 days trading horizon Brookfield Infrastructure is expected to generate 1.44 times less return on investment than Onex Corp. But when comparing it to its historical volatility, Brookfield Infrastructure Partners is 1.49 times less risky than Onex Corp. It trades about 0.05 of its potential returns per unit of risk. Onex Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 11,163 in Onex Corp on September 18, 2024 and sell it today you would earn a total of 111.00 from holding Onex Corp or generate 0.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Brookfield Infrastructure Part vs. Onex Corp
Performance |
| Timeline |
| Brookfield Infrastructure |
| Onex Corp |
Brookfield Infrastructure and Onex Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Infrastructure and Onex Corp
The main advantage of trading using opposite Brookfield Infrastructure and Onex Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Infrastructure position performs unexpectedly, Onex Corp 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 Onex Corp will offset losses from the drop in Onex Corp's long position.| Brookfield Infrastructure vs. Microsoft Corp CDR | Brookfield Infrastructure vs. Apple Inc CDR | Brookfield Infrastructure vs. Alphabet Inc CDR | Brookfield Infrastructure vs. Amazon CDR |
| Onex Corp vs. Intact Financial | Onex Corp vs. Open Text Corp | Onex Corp vs. Waste Connections | Onex Corp vs. Fairfax Financial Holdings |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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