Correlation Between Brookfield Infrastructure and Enagás SA
Can any of the company-specific risk be diversified away by investing in both Brookfield Infrastructure and Enagás SA 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 Enagás SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brookfield Infrastructure Corp and Enags SA, you can compare the effects of market volatilities on Brookfield Infrastructure and Enagás SA 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 Enagás SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Infrastructure and Enagás SA.
Diversification Opportunities for Brookfield Infrastructure and Enagás SA
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Brookfield and Enagás is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Infrastructure Corp and Enags SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enagás 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 Corp are associated (or correlated) with Enagás SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enagás SA has no effect on the direction of Brookfield Infrastructure i.e., Brookfield Infrastructure and Enagás SA go up and down completely randomly.
Pair Corralation between Brookfield Infrastructure and Enagás SA
Given the investment horizon of 90 days Brookfield Infrastructure Corp is expected to generate 0.5 times more return on investment than Enagás SA. However, Brookfield Infrastructure Corp is 1.98 times less risky than Enagás SA. It trades about 0.15 of its potential returns per unit of risk. Enags SA is currently generating about 0.02 per unit of risk. If you would invest 3,278 in Brookfield Infrastructure Corp on September 3, 2024 and sell it today you would earn a total of 1,211 from holding Brookfield Infrastructure Corp or generate 36.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brookfield Infrastructure Corp vs. Enags SA
Performance |
| Timeline |
| Brookfield Infrastructure |
| Enagás SA |
Brookfield Infrastructure and Enagás SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Infrastructure and Enagás SA
The main advantage of trading using opposite Brookfield Infrastructure and Enagás SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Infrastructure position performs unexpectedly, Enagás SA 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 Enagás SA will offset losses from the drop in Enagás SA's long position.| Brookfield Infrastructure vs. NewJersey Resources | Brookfield Infrastructure vs. Atmos Energy | Brookfield Infrastructure vs. UGI Corporation | Brookfield Infrastructure vs. Chesapeake Utilities |
| Enagás SA vs. NewJersey Resources | Enagás SA vs. Atmos Energy | Enagás SA vs. Brookfield Infrastructure Corp | Enagás SA vs. New Fortress 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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