Correlation Between Brookfield Infrastructure and IShares Canadian
Can any of the company-specific risk be diversified away by investing in both Brookfield Infrastructure and IShares Canadian 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 IShares Canadian 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 iShares Canadian HYBrid, you can compare the effects of market volatilities on Brookfield Infrastructure and IShares Canadian 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 IShares Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Infrastructure and IShares Canadian.
Diversification Opportunities for Brookfield Infrastructure and IShares Canadian
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Brookfield and IShares is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Infrastructure Part and iShares Canadian HYBrid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Canadian HYBrid 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 IShares Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Canadian HYBrid has no effect on the direction of Brookfield Infrastructure i.e., Brookfield Infrastructure and IShares Canadian go up and down completely randomly.
Pair Corralation between Brookfield Infrastructure and IShares Canadian
Assuming the 90 days trading horizon Brookfield Infrastructure Partners is expected to generate 2.82 times more return on investment than IShares Canadian. However, Brookfield Infrastructure is 2.82 times more volatile than iShares Canadian HYBrid. It trades about 0.12 of its potential returns per unit of risk. iShares Canadian HYBrid is currently generating about 0.18 per unit of risk. If you would invest 1,768 in Brookfield Infrastructure Partners on September 14, 2024 and sell it today you would earn a total of 597.00 from holding Brookfield Infrastructure Partners or generate 33.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brookfield Infrastructure Part vs. iShares Canadian HYBrid
Performance |
| Timeline |
| Brookfield Infrastructure |
| iShares Canadian HYBrid |
Brookfield Infrastructure and IShares Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Infrastructure and IShares Canadian
The main advantage of trading using opposite Brookfield Infrastructure and IShares Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Infrastructure position performs unexpectedly, IShares Canadian 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 IShares Canadian will offset losses from the drop in IShares Canadian'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 |
| IShares Canadian vs. iShares Core Canadian | IShares Canadian vs. BMO Mid Corporate | IShares Canadian vs. Global X Active | IShares Canadian vs. iShares 1 10Yr Laddered |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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