Correlation Between Emera Srs and Brookfield Infrastructure
Can any of the company-specific risk be diversified away by investing in both Emera Srs 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 Emera Srs and Brookfield Infrastructure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emera Srs C and Brookfield Infrastructure Partners, you can compare the effects of market volatilities on Emera Srs 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 Emera Srs with a short position of Brookfield Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emera Srs and Brookfield Infrastructure.
Diversification Opportunities for Emera Srs and Brookfield Infrastructure
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Emera and Brookfield is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Emera Srs C and Brookfield Infrastructure Part in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Infrastructure and Emera Srs 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 Emera Srs C 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 Emera Srs i.e., Emera Srs and Brookfield Infrastructure go up and down completely randomly.
Pair Corralation between Emera Srs and Brookfield Infrastructure
Assuming the 90 days trading horizon Emera Srs C is expected to generate 0.33 times more return on investment than Brookfield Infrastructure. However, Emera Srs C is 3.05 times less risky than Brookfield Infrastructure. It trades about 0.48 of its potential returns per unit of risk. Brookfield Infrastructure Partners is currently generating about -0.08 per unit of risk. If you would invest 2,285 in Emera Srs C on October 9, 2024 and sell it today you would earn a total of 110.00 from holding Emera Srs C or generate 4.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emera Srs C vs. Brookfield Infrastructure Part
Performance |
| Timeline |
| Emera Srs C |
| Brookfield Infrastructure |
Emera Srs and Brookfield Infrastructure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emera Srs and Brookfield Infrastructure
The main advantage of trading using opposite Emera Srs and Brookfield Infrastructure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emera Srs 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.| Emera Srs vs. Brookfield Infrastructure Partners | Emera Srs vs. Emera Pref A | Emera Srs vs. Brookfield Infrastructure Partners | Emera Srs vs. ATCO |
| Brookfield Infrastructure vs. Brookfield Renewable Partners | Brookfield Infrastructure vs. Emera Inc | Brookfield Infrastructure vs. Fortis Inc | Brookfield Infrastructure vs. Algonquin Power Utilities |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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