Correlation Between FTAI Infrastructure and Brookfield Business
Can any of the company-specific risk be diversified away by investing in both FTAI Infrastructure and Brookfield Business 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 FTAI Infrastructure and Brookfield Business into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FTAI Infrastructure and Brookfield Business Partners, you can compare the effects of market volatilities on FTAI Infrastructure and Brookfield Business 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 FTAI Infrastructure with a short position of Brookfield Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of FTAI Infrastructure and Brookfield Business.
Diversification Opportunities for FTAI Infrastructure and Brookfield Business
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between FTAI and Brookfield is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding FTAI Infrastructure and Brookfield Business Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Business and FTAI 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 FTAI Infrastructure are associated (or correlated) with Brookfield Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield Business has no effect on the direction of FTAI Infrastructure i.e., FTAI Infrastructure and Brookfield Business go up and down completely randomly.
Pair Corralation between FTAI Infrastructure and Brookfield Business
Considering the 90-day investment horizon FTAI Infrastructure is expected to under-perform the Brookfield Business. In addition to that, FTAI Infrastructure is 1.64 times more volatile than Brookfield Business Partners. It trades about 0.0 of its total potential returns per unit of risk. Brookfield Business Partners is currently generating about 0.43 per unit of volatility. If you would invest 2,167 in Brookfield Business Partners on August 30, 2024 and sell it today you would earn a total of 441.00 from holding Brookfield Business Partners or generate 20.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FTAI Infrastructure vs. Brookfield Business Partners
Performance |
| Timeline |
| FTAI Infrastructure |
| Brookfield Business |
FTAI Infrastructure and Brookfield Business Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FTAI Infrastructure and Brookfield Business
The main advantage of trading using opposite FTAI Infrastructure and Brookfield Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FTAI Infrastructure position performs unexpectedly, Brookfield Business 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 Business will offset losses from the drop in Brookfield Business' long position.| FTAI Infrastructure vs. Steel Partners Holdings | FTAI Infrastructure vs. Brookfield Business Partners | FTAI Infrastructure vs. Griffon | FTAI Infrastructure vs. Tejon Ranch Co |
| Brookfield Business vs. Steel Partners Holdings | Brookfield Business vs. Compass Diversified | Brookfield Business vs. Matthews International | Brookfield Business vs. Tejon Ranch Co |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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