Correlation Between Brookfield Infrastructure and Postmedia Network
Can any of the company-specific risk be diversified away by investing in both Brookfield Infrastructure and Postmedia Network 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 Postmedia Network 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 Postmedia Network Canada, you can compare the effects of market volatilities on Brookfield Infrastructure and Postmedia Network 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 Postmedia Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Infrastructure and Postmedia Network.
Diversification Opportunities for Brookfield Infrastructure and Postmedia Network
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Brookfield and Postmedia is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Infrastructure Part and Postmedia Network Canada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Postmedia Network Canada 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 Postmedia Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Postmedia Network Canada has no effect on the direction of Brookfield Infrastructure i.e., Brookfield Infrastructure and Postmedia Network go up and down completely randomly.
Pair Corralation between Brookfield Infrastructure and Postmedia Network
Assuming the 90 days trading horizon Brookfield Infrastructure Partners is expected to generate 0.45 times more return on investment than Postmedia Network. However, Brookfield Infrastructure Partners is 2.24 times less risky than Postmedia Network. It trades about 0.08 of its potential returns per unit of risk. Postmedia Network Canada is currently generating about -0.13 per unit of risk. If you would invest 2,425 in Brookfield Infrastructure Partners on September 12, 2024 and sell it today you would earn a total of 76.00 from holding Brookfield Infrastructure Partners or generate 3.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brookfield Infrastructure Part vs. Postmedia Network Canada
Performance |
| Timeline |
| Brookfield Infrastructure |
| Postmedia Network Canada |
Brookfield Infrastructure and Postmedia Network Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Infrastructure and Postmedia Network
The main advantage of trading using opposite Brookfield Infrastructure and Postmedia Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Infrastructure position performs unexpectedly, Postmedia Network 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 Postmedia Network will offset losses from the drop in Postmedia Network'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 |
| Postmedia Network vs. Income Financial Trust | Postmedia Network vs. Quipt Home Medical | Postmedia Network vs. Atrium Mortgage Investment | Postmedia Network vs. Olympia Financial Group |
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.
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