Correlation Between Sun Lif and Brookfield Infrastructure
Can any of the company-specific risk be diversified away by investing in both Sun Lif 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 Sun Lif and Brookfield Infrastructure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sun Lif Non and Brookfield Infrastructure Partners, you can compare the effects of market volatilities on Sun Lif 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 Sun Lif with a short position of Brookfield Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Lif and Brookfield Infrastructure.
Diversification Opportunities for Sun Lif and Brookfield Infrastructure
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sun and Brookfield is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Sun Lif Non and Brookfield Infrastructure Part in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Infrastructure and Sun Lif 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 Sun Lif Non 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 Sun Lif i.e., Sun Lif and Brookfield Infrastructure go up and down completely randomly.
Pair Corralation between Sun Lif and Brookfield Infrastructure
Assuming the 90 days trading horizon Sun Lif Non is expected to generate 1.14 times more return on investment than Brookfield Infrastructure. However, Sun Lif is 1.14 times more volatile than Brookfield Infrastructure Partners. It trades about 0.3 of its potential returns per unit of risk. Brookfield Infrastructure Partners is currently generating about 0.16 per unit of risk. If you would invest 1,874 in Sun Lif Non on October 26, 2024 and sell it today you would earn a total of 211.00 from holding Sun Lif Non or generate 11.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.62% |
| Values | Daily Returns |
Sun Lif Non vs. Brookfield Infrastructure Part
Performance |
| Timeline |
| Sun Lif Non |
| Brookfield Infrastructure |
Sun Lif and Brookfield Infrastructure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Lif and Brookfield Infrastructure
The main advantage of trading using opposite Sun Lif and Brookfield Infrastructure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Lif 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.| Sun Lif vs. Canlan Ice Sports | Sun Lif vs. TGS Esports | Sun Lif vs. Laurentian Bank | Sun Lif vs. Fairfax Financial Holdings |
| Brookfield Infrastructure vs. Toronto Dominion Bank | Brookfield Infrastructure vs. Laurentian Bank | Brookfield Infrastructure vs. Income Financial Trust | Brookfield Infrastructure vs. iA Financial |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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