Correlation Between Brookfield Infrastructure and UNITIL
Can any of the company-specific risk be diversified away by investing in both Brookfield Infrastructure and UNITIL 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 UNITIL 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 UNITIL, you can compare the effects of market volatilities on Brookfield Infrastructure and UNITIL 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 UNITIL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Infrastructure and UNITIL.
Diversification Opportunities for Brookfield Infrastructure and UNITIL
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Brookfield and UNITIL is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Infrastructure Part and UNITIL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNITIL 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 UNITIL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNITIL has no effect on the direction of Brookfield Infrastructure i.e., Brookfield Infrastructure and UNITIL go up and down completely randomly.
Pair Corralation between Brookfield Infrastructure and UNITIL
Considering the 90-day investment horizon Brookfield Infrastructure Partners is expected to under-perform the UNITIL. But the stock apears to be less risky and, when comparing its historical volatility, Brookfield Infrastructure Partners is 1.98 times less risky than UNITIL. The stock trades about -0.02 of its potential returns per unit of risk. The UNITIL is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 5,856 in UNITIL on August 28, 2024 and sell it today you would earn a total of 207.00 from holding UNITIL or generate 3.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brookfield Infrastructure Part vs. UNITIL
Performance |
| Timeline |
| Brookfield Infrastructure |
| UNITIL |
Brookfield Infrastructure and UNITIL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Infrastructure and UNITIL
The main advantage of trading using opposite Brookfield Infrastructure and UNITIL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Infrastructure position performs unexpectedly, UNITIL 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 UNITIL will offset losses from the drop in UNITIL'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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |