Correlation Between Brookfield Infrastructure and Sun Life
Can any of the company-specific risk be diversified away by investing in both Brookfield Infrastructure and Sun Life 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 Sun Life 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 Sun Life Financial, you can compare the effects of market volatilities on Brookfield Infrastructure and Sun Life 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 Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Infrastructure and Sun Life.
Diversification Opportunities for Brookfield Infrastructure and Sun Life
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Brookfield and Sun is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Infrastructure Part and Sun Life Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Life Financial 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 Sun Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Life Financial has no effect on the direction of Brookfield Infrastructure i.e., Brookfield Infrastructure and Sun Life go up and down completely randomly.
Pair Corralation between Brookfield Infrastructure and Sun Life
Assuming the 90 days trading horizon Brookfield Infrastructure Partners is expected to generate 0.92 times more return on investment than Sun Life. However, Brookfield Infrastructure Partners is 1.09 times less risky than Sun Life. It trades about 0.11 of its potential returns per unit of risk. Sun Life Financial is currently generating about 0.07 per unit of risk. If you would invest 1,860 in Brookfield Infrastructure Partners on September 14, 2024 and sell it today you would earn a total of 505.00 from holding Brookfield Infrastructure Partners or generate 27.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Brookfield Infrastructure Part vs. Sun Life Financial
Performance |
| Timeline |
| Brookfield Infrastructure |
| Sun Life Financial |
Brookfield Infrastructure and Sun Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Infrastructure and Sun Life
The main advantage of trading using opposite Brookfield Infrastructure and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Infrastructure position performs unexpectedly, Sun Life 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 Sun Life will offset losses from the drop in Sun Life's long position.| Brookfield Infrastructure vs. Canlan Ice Sports | Brookfield Infrastructure vs. Forsys Metals Corp | Brookfield Infrastructure vs. Metalero Mining Corp | Brookfield Infrastructure vs. Ramp Metals |
| Sun Life vs. Labrador Iron Ore | Sun Life vs. Caribbean Utilities | Sun Life vs. Costco Wholesale Corp | Sun Life vs. Boat Rocker Media |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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