Correlation Between Brookfield Infrastructure and One Gas
Can any of the company-specific risk be diversified away by investing in both Brookfield Infrastructure and One Gas 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 One Gas 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 One Gas, you can compare the effects of market volatilities on Brookfield Infrastructure and One Gas 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 One Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Infrastructure and One Gas.
Diversification Opportunities for Brookfield Infrastructure and One Gas
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Brookfield and One is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Infrastructure Corp and One Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Gas 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 One Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Gas has no effect on the direction of Brookfield Infrastructure i.e., Brookfield Infrastructure and One Gas go up and down completely randomly.
Pair Corralation between Brookfield Infrastructure and One Gas
Given the investment horizon of 90 days Brookfield Infrastructure is expected to generate 7.32 times less return on investment than One Gas. But when comparing it to its historical volatility, Brookfield Infrastructure Corp is 1.0 times less risky than One Gas. It trades about 0.03 of its potential returns per unit of risk. One Gas is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 7,305 in One Gas on August 27, 2024 and sell it today you would earn a total of 482.00 from holding One Gas or generate 6.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brookfield Infrastructure Corp vs. One Gas
Performance |
| Timeline |
| Brookfield Infrastructure |
| One Gas |
Brookfield Infrastructure and One Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Infrastructure and One Gas
The main advantage of trading using opposite Brookfield Infrastructure and One Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Infrastructure position performs unexpectedly, One Gas 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 One Gas will offset losses from the drop in One Gas' long position.The idea behind Brookfield Infrastructure Corp and One Gas pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| One Gas vs. Northwest Natural Gas | One Gas vs. Chesapeake Utilities | One Gas vs. NewJersey Resources | One Gas vs. RGC Resources |
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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