Correlation Between Hawaiian Electric and Brookfield Infrastructure
Can any of the company-specific risk be diversified away by investing in both Hawaiian Electric 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 Hawaiian Electric and Brookfield Infrastructure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hawaiian Electric Industries and Brookfield Infrastructure Corp, you can compare the effects of market volatilities on Hawaiian Electric 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 Hawaiian Electric with a short position of Brookfield Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hawaiian Electric and Brookfield Infrastructure.
Diversification Opportunities for Hawaiian Electric and Brookfield Infrastructure
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hawaiian and Brookfield is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Hawaiian Electric Industries and Brookfield Infrastructure Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Infrastructure and Hawaiian Electric 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 Hawaiian Electric Industries 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 Hawaiian Electric i.e., Hawaiian Electric and Brookfield Infrastructure go up and down completely randomly.
Pair Corralation between Hawaiian Electric and Brookfield Infrastructure
Allowing for the 90-day total investment horizon Hawaiian Electric Industries is expected to generate 1.4 times more return on investment than Brookfield Infrastructure. However, Hawaiian Electric is 1.4 times more volatile than Brookfield Infrastructure Corp. It trades about 0.12 of its potential returns per unit of risk. Brookfield Infrastructure Corp is currently generating about 0.03 per unit of risk. If you would invest 1,007 in Hawaiian Electric Industries on August 27, 2024 and sell it today you would earn a total of 54.00 from holding Hawaiian Electric Industries or generate 5.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hawaiian Electric Industries vs. Brookfield Infrastructure Corp
Performance |
| Timeline |
| Hawaiian Electric |
| Brookfield Infrastructure |
Hawaiian Electric and Brookfield Infrastructure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hawaiian Electric and Brookfield Infrastructure
The main advantage of trading using opposite Hawaiian Electric and Brookfield Infrastructure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hawaiian Electric 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.| Hawaiian Electric vs. DTE Energy | Hawaiian Electric vs. Alliant Energy Corp | Hawaiian Electric vs. Ameren Corp | Hawaiian Electric vs. CenterPoint Energy |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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