Correlation Between Companhia Energetica and Brookfield Infrastructure
Can any of the company-specific risk be diversified away by investing in both Companhia Energetica and Brookfield Infrastructure 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 Companhia Energetica and Brookfield Infrastructure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Companhia Energetica de and Brookfield Infrastructure Partners, you can compare the effects of market volatilities on Companhia Energetica and Brookfield Infrastructure 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 Companhia Energetica with a short position of Brookfield Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Companhia Energetica and Brookfield Infrastructure.
Diversification Opportunities for Companhia Energetica and Brookfield Infrastructure
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Companhia and Brookfield is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Companhia Energetica de and Brookfield Infrastructure Part in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Infrastructure and Companhia Energetica 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 Companhia Energetica de are associated (or correlated) with Brookfield Infrastructure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield Infrastructure has no effect on the direction of Companhia Energetica i.e., Companhia Energetica and Brookfield Infrastructure go up and down completely randomly.
Pair Corralation between Companhia Energetica and Brookfield Infrastructure
Considering the 90-day investment horizon Companhia Energetica de is expected to generate 1.31 times more return on investment than Brookfield Infrastructure. However, Companhia Energetica is 1.31 times more volatile than Brookfield Infrastructure Partners. It trades about 0.05 of its potential returns per unit of risk. Brookfield Infrastructure Partners is currently generating about 0.02 per unit of risk. If you would invest 124.00 in Companhia Energetica de on November 1, 2024 and sell it today you would earn a total of 63.00 from holding Companhia Energetica de or generate 50.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Companhia Energetica de vs. Brookfield Infrastructure Part
Performance |
| Timeline |
| Companhia Energetica |
| Brookfield Infrastructure |
Companhia Energetica and Brookfield Infrastructure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Companhia Energetica and Brookfield Infrastructure
The main advantage of trading using opposite Companhia Energetica and Brookfield Infrastructure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Companhia Energetica position performs unexpectedly, Brookfield Infrastructure 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 Brookfield Infrastructure will offset losses from the drop in Brookfield Infrastructure's long position.| Companhia Energetica vs. NorthWestern | Companhia Energetica vs. Montauk Renewables | Companhia Energetica vs. Allete Inc | Companhia Energetica vs. Companhia Paranaense de |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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