Correlation Between Brookfield Infrastructure and Franklin Utilities
Can any of the company-specific risk be diversified away by investing in both Brookfield Infrastructure and Franklin Utilities 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 Franklin Utilities 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 Franklin Utilities, you can compare the effects of market volatilities on Brookfield Infrastructure and Franklin Utilities 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 Franklin Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Infrastructure and Franklin Utilities.
Diversification Opportunities for Brookfield Infrastructure and Franklin Utilities
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Brookfield and Franklin is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Infrastructure Part and Franklin Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Utilities 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 Franklin Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Utilities has no effect on the direction of Brookfield Infrastructure i.e., Brookfield Infrastructure and Franklin Utilities go up and down completely randomly.
Pair Corralation between Brookfield Infrastructure and Franklin Utilities
Considering the 90-day investment horizon Brookfield Infrastructure is expected to generate 1.12 times less return on investment than Franklin Utilities. In addition to that, Brookfield Infrastructure is 1.93 times more volatile than Franklin Utilities. It trades about 0.02 of its total potential returns per unit of risk. Franklin Utilities is currently generating about 0.04 per unit of volatility. If you would invest 2,152 in Franklin Utilities on September 3, 2024 and sell it today you would earn a total of 445.00 from holding Franklin Utilities or generate 20.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brookfield Infrastructure Part vs. Franklin Utilities
Performance |
| Timeline |
| Brookfield Infrastructure |
| Franklin Utilities |
Brookfield Infrastructure and Franklin Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Infrastructure and Franklin Utilities
The main advantage of trading using opposite Brookfield Infrastructure and Franklin Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Infrastructure position performs unexpectedly, Franklin Utilities 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 Franklin Utilities will offset losses from the drop in Franklin Utilities' long position.| Brookfield Infrastructure vs. Allete Inc | Brookfield Infrastructure vs. Avista | Brookfield Infrastructure vs. NorthWestern | Brookfield Infrastructure vs. The AES |
| Franklin Utilities vs. Us Government Securities | Franklin Utilities vs. Dunham Porategovernment Bond | Franklin Utilities vs. Aig Government Money | Franklin Utilities vs. Virtus Seix Government |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |