Correlation Between Brookfield Infrastructure and New Fortress
Can any of the company-specific risk be diversified away by investing in both Brookfield Infrastructure and New Fortress 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 New Fortress 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 New Fortress Energy, you can compare the effects of market volatilities on Brookfield Infrastructure and New Fortress 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 New Fortress. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Infrastructure and New Fortress.
Diversification Opportunities for Brookfield Infrastructure and New Fortress
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Brookfield and New is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Infrastructure Part and New Fortress Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Fortress Energy 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 New Fortress. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Fortress Energy has no effect on the direction of Brookfield Infrastructure i.e., Brookfield Infrastructure and New Fortress go up and down completely randomly.
Pair Corralation between Brookfield Infrastructure and New Fortress
Considering the 90-day investment horizon Brookfield Infrastructure Partners is expected to generate 0.59 times more return on investment than New Fortress. However, Brookfield Infrastructure Partners is 1.7 times less risky than New Fortress. It trades about 0.13 of its potential returns per unit of risk. New Fortress Energy is currently generating about -0.39 per unit of risk. If you would invest 3,122 in Brookfield Infrastructure Partners on November 18, 2024 and sell it today you would earn a total of 162.00 from holding Brookfield Infrastructure Partners or generate 5.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brookfield Infrastructure Part vs. New Fortress Energy
Performance |
| Timeline |
| Brookfield Infrastructure |
| New Fortress Energy |
Brookfield Infrastructure and New Fortress Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Infrastructure and New Fortress
The main advantage of trading using opposite Brookfield Infrastructure and New Fortress positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Infrastructure position performs unexpectedly, New Fortress 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 New Fortress will offset losses from the drop in New Fortress' long position.| Brookfield Infrastructure vs. Allete Inc | Brookfield Infrastructure vs. Avista | Brookfield Infrastructure vs. NorthWestern | Brookfield Infrastructure vs. The AES |
| New Fortress vs. FLEX LNG | New Fortress vs. Coterra Energy | New Fortress vs. Golar LNG Limited | New Fortress vs. Excelerate Energy |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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