Correlation Between Brookfield Infrastructure and Companhia Energetica
Can any of the company-specific risk be diversified away by investing in both Brookfield Infrastructure and Companhia Energetica 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 Companhia Energetica 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 Companhia Energetica de, you can compare the effects of market volatilities on Brookfield Infrastructure and Companhia Energetica 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 Companhia Energetica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Infrastructure and Companhia Energetica.
Diversification Opportunities for Brookfield Infrastructure and Companhia Energetica
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Brookfield and Companhia is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Infrastructure Part and Companhia Energetica de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Companhia Energetica 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 Companhia Energetica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Companhia Energetica has no effect on the direction of Brookfield Infrastructure i.e., Brookfield Infrastructure and Companhia Energetica go up and down completely randomly.
Pair Corralation between Brookfield Infrastructure and Companhia Energetica
Considering the 90-day investment horizon Brookfield Infrastructure is expected to generate 11.84 times less return on investment than Companhia Energetica. But when comparing it to its historical volatility, Brookfield Infrastructure Partners is 2.08 times less risky than Companhia Energetica. It trades about 0.02 of its potential returns per unit of risk. Companhia Energetica de is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 195.00 in Companhia Energetica de on August 30, 2024 and sell it today you would earn a total of 11.00 from holding Companhia Energetica de or generate 5.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brookfield Infrastructure Part vs. Companhia Energetica de
Performance |
| Timeline |
| Brookfield Infrastructure |
| Companhia Energetica |
Brookfield Infrastructure and Companhia Energetica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Infrastructure and Companhia Energetica
The main advantage of trading using opposite Brookfield Infrastructure and Companhia Energetica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Infrastructure position performs unexpectedly, Companhia Energetica 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 Companhia Energetica will offset losses from the drop in Companhia Energetica's long position.| Brookfield Infrastructure vs. Allete Inc | Brookfield Infrastructure vs. Avista | Brookfield Infrastructure vs. NorthWestern | Brookfield Infrastructure vs. The AES |
| Companhia Energetica vs. NorthWestern | Companhia Energetica vs. Montauk Renewables | Companhia Energetica vs. Allete Inc | Companhia Energetica vs. Companhia Paranaense de |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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