Correlation Between Kenon Holdings and Brookfield Infrastructure
Can any of the company-specific risk be diversified away by investing in both Kenon Holdings 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 Kenon Holdings and Brookfield Infrastructure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kenon Holdings and Brookfield Infrastructure Partners, you can compare the effects of market volatilities on Kenon Holdings 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 Kenon Holdings with a short position of Brookfield Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kenon Holdings and Brookfield Infrastructure.
Diversification Opportunities for Kenon Holdings and Brookfield Infrastructure
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Kenon and Brookfield is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Kenon Holdings and Brookfield Infrastructure Part in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Infrastructure and Kenon Holdings 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 Kenon Holdings 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 Kenon Holdings i.e., Kenon Holdings and Brookfield Infrastructure go up and down completely randomly.
Pair Corralation between Kenon Holdings and Brookfield Infrastructure
Considering the 90-day investment horizon Kenon Holdings is expected to under-perform the Brookfield Infrastructure. In addition to that, Kenon Holdings is 1.73 times more volatile than Brookfield Infrastructure Partners. It trades about -0.13 of its total potential returns per unit of risk. Brookfield Infrastructure Partners is currently generating about 0.13 per unit of volatility. If you would invest 1,731 in Brookfield Infrastructure Partners on November 2, 2024 and sell it today you would earn a total of 42.00 from holding Brookfield Infrastructure Partners or generate 2.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kenon Holdings vs. Brookfield Infrastructure Part
Performance |
| Timeline |
| Kenon Holdings |
| Brookfield Infrastructure |
Kenon Holdings and Brookfield Infrastructure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kenon Holdings and Brookfield Infrastructure
The main advantage of trading using opposite Kenon Holdings and Brookfield Infrastructure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kenon Holdings 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.| Kenon Holdings vs. Vistra Energy Corp | Kenon Holdings vs. Pampa Energia SA | Kenon Holdings vs. NRG Energy | Kenon Holdings vs. TransAlta Corp |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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