Correlation Between Excelsior Mining and Brookfield Infrastructure
Can any of the company-specific risk be diversified away by investing in both Excelsior Mining 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 Excelsior Mining and Brookfield Infrastructure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Excelsior Mining Corp and Brookfield Infrastructure Partners, you can compare the effects of market volatilities on Excelsior Mining 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 Excelsior Mining with a short position of Brookfield Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Excelsior Mining and Brookfield Infrastructure.
Diversification Opportunities for Excelsior Mining and Brookfield Infrastructure
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Excelsior and Brookfield is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Excelsior Mining Corp and Brookfield Infrastructure Part in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Infrastructure and Excelsior Mining 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 Excelsior Mining Corp 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 Excelsior Mining i.e., Excelsior Mining and Brookfield Infrastructure go up and down completely randomly.
Pair Corralation between Excelsior Mining and Brookfield Infrastructure
Assuming the 90 days trading horizon Excelsior Mining Corp is expected to generate 6.16 times more return on investment than Brookfield Infrastructure. However, Excelsior Mining is 6.16 times more volatile than Brookfield Infrastructure Partners. It trades about 0.03 of its potential returns per unit of risk. Brookfield Infrastructure Partners is currently generating about 0.1 per unit of risk. If you would invest 16.00 in Excelsior Mining Corp on September 13, 2024 and sell it today you would earn a total of 3.00 from holding Excelsior Mining Corp or generate 18.75% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Excelsior Mining Corp vs. Brookfield Infrastructure Part
Performance |
Timeline |
Excelsior Mining Corp |
Brookfield Infrastructure |
Excelsior Mining and Brookfield Infrastructure Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Excelsior Mining and Brookfield Infrastructure
The main advantage of trading using opposite Excelsior Mining and Brookfield Infrastructure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Excelsior Mining 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.Excelsior Mining vs. First Majestic Silver | Excelsior Mining vs. Ivanhoe Energy | Excelsior Mining vs. Orezone Gold Corp | Excelsior Mining vs. Faraday Copper 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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