Correlation Between GreenPower and Brookfield Infrastructure
Can any of the company-specific risk be diversified away by investing in both GreenPower 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 GreenPower and Brookfield Infrastructure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GreenPower Motor and Brookfield Infrastructure Partners, you can compare the effects of market volatilities on GreenPower 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 GreenPower with a short position of Brookfield Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenPower and Brookfield Infrastructure.
Diversification Opportunities for GreenPower and Brookfield Infrastructure
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GreenPower and Brookfield is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding GreenPower Motor and Brookfield Infrastructure Part in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Infrastructure and GreenPower 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 GreenPower Motor 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 GreenPower i.e., GreenPower and Brookfield Infrastructure go up and down completely randomly.
Pair Corralation between GreenPower and Brookfield Infrastructure
Assuming the 90 days horizon GreenPower Motor is expected to generate 6.88 times more return on investment than Brookfield Infrastructure. However, GreenPower is 6.88 times more volatile than Brookfield Infrastructure Partners. It trades about 0.06 of its potential returns per unit of risk. Brookfield Infrastructure Partners is currently generating about 0.17 per unit of risk. If you would invest 132.00 in GreenPower Motor on September 4, 2024 and sell it today you would earn a total of 5.00 from holding GreenPower Motor or generate 3.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GreenPower Motor vs. Brookfield Infrastructure Part
Performance |
| Timeline |
| GreenPower Motor |
| Brookfield Infrastructure |
GreenPower and Brookfield Infrastructure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GreenPower and Brookfield Infrastructure
The main advantage of trading using opposite GreenPower and Brookfield Infrastructure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenPower 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.| GreenPower vs. NFI Group | GreenPower vs. Docebo Inc | GreenPower vs. WELL Health Technologies | GreenPower vs. Dye Durham |
| Brookfield Infrastructure vs. Berkshire Hathaway CDR | Brookfield Infrastructure vs. Microsoft Corp CDR | Brookfield Infrastructure vs. Apple Inc CDR | Brookfield Infrastructure vs. Alphabet Inc CDR |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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