Correlation Between Brookfield Infrastructure and Sun Hung
Can any of the company-specific risk be diversified away by investing in both Brookfield Infrastructure and Sun Hung 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 Sun Hung 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 Sun Hung Kai, you can compare the effects of market volatilities on Brookfield Infrastructure and Sun Hung 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 Sun Hung. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Infrastructure and Sun Hung.
Diversification Opportunities for Brookfield Infrastructure and Sun Hung
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Brookfield and Sun is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Infrastructure Part and Sun Hung Kai in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Hung Kai 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 Sun Hung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Hung Kai has no effect on the direction of Brookfield Infrastructure i.e., Brookfield Infrastructure and Sun Hung go up and down completely randomly.
Pair Corralation between Brookfield Infrastructure and Sun Hung
Considering the 90-day investment horizon Brookfield Infrastructure Partners is expected to generate 0.55 times more return on investment than Sun Hung. However, Brookfield Infrastructure Partners is 1.8 times less risky than Sun Hung. It trades about 0.01 of its potential returns per unit of risk. Sun Hung Kai is currently generating about -0.01 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 | Weak |
| Accuracy | 64.97% |
| Values | Daily Returns |
Brookfield Infrastructure Part vs. Sun Hung Kai
Performance |
| Timeline |
| Brookfield Infrastructure |
| Sun Hung Kai |
Brookfield Infrastructure and Sun Hung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Infrastructure and Sun Hung
The main advantage of trading using opposite Brookfield Infrastructure and Sun Hung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Infrastructure position performs unexpectedly, Sun Hung 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 Sun Hung will offset losses from the drop in Sun Hung's long position.| Brookfield Infrastructure vs. Allete Inc | Brookfield Infrastructure vs. Avista | Brookfield Infrastructure vs. NorthWestern | Brookfield Infrastructure vs. The AES |
| Sun Hung vs. HUMANA INC | Sun Hung vs. SCOR PK | Sun Hung vs. Aquagold International | Sun Hung vs. Thrivent High Yield |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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