Correlation Between Brookfield Infrastructure and Lojas Renner
Can any of the company-specific risk be diversified away by investing in both Brookfield Infrastructure and Lojas Renner 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 Lojas Renner 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 Lojas Renner SA, you can compare the effects of market volatilities on Brookfield Infrastructure and Lojas Renner 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 Lojas Renner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Infrastructure and Lojas Renner.
Diversification Opportunities for Brookfield Infrastructure and Lojas Renner
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Brookfield and Lojas is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Infrastructure Part and Lojas Renner SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lojas Renner SA 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 Lojas Renner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lojas Renner SA has no effect on the direction of Brookfield Infrastructure i.e., Brookfield Infrastructure and Lojas Renner go up and down completely randomly.
Pair Corralation between Brookfield Infrastructure and Lojas Renner
Considering the 90-day investment horizon Brookfield Infrastructure Partners is expected to generate 0.53 times more return on investment than Lojas Renner. However, Brookfield Infrastructure Partners is 1.9 times less risky than Lojas Renner. It trades about 0.01 of its potential returns per unit of risk. Lojas Renner SA is currently generating about -0.03 per unit of risk. If you would invest 3,444 in Brookfield Infrastructure Partners on August 31, 2024 and sell it today you would earn a total of 53.00 from holding Brookfield Infrastructure Partners or generate 1.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 8.56% |
| Values | Daily Returns |
Brookfield Infrastructure Part vs. Lojas Renner SA
Performance |
| Timeline |
| Brookfield Infrastructure |
| Lojas Renner SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Brookfield Infrastructure and Lojas Renner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Infrastructure and Lojas Renner
The main advantage of trading using opposite Brookfield Infrastructure and Lojas Renner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Infrastructure position performs unexpectedly, Lojas Renner 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 Lojas Renner will offset losses from the drop in Lojas Renner's long position.| Brookfield Infrastructure vs. Allete Inc | Brookfield Infrastructure vs. Avista | Brookfield Infrastructure vs. NorthWestern | Brookfield Infrastructure vs. The AES |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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