Correlation Between Brookfield Infrastructure and Dividend

Can any of the company-specific risk be diversified away by investing in both Brookfield Infrastructure and Dividend 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 Brookfield Infrastructure and Dividend into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Brookfield Infrastructure Partners and Dividend 15 Split, you can compare the effects of market volatilities on Brookfield Infrastructure and Dividend 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 Brookfield Infrastructure with a short position of Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Infrastructure and Dividend.

Diversification Opportunities for Brookfield Infrastructure and Dividend

0.69

Correlation Coefficient

Brookfield Infrastructure  Dividend

Poor diversification

The 3 months correlation between Brookfield and Dividend is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Infrastructure Part and Dividend 15 Split in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dividend 15 Split and Brookfield Infrastructure 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 Brookfield Infrastructure Partners are associated (or correlated) with Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dividend 15 Split has no effect on the direction of Brookfield Infrastructure i.e., Brookfield Infrastructure and Dividend go up and down completely randomly.

Pair Corralation between Brookfield Infrastructure and Dividend

Assuming the 90 days trading horizon Brookfield Infrastructure is expected to generate 11.65 times less return on investment than Dividend. But when comparing it to its historical volatility, Brookfield Infrastructure Partners is 1.98 times less risky than Dividend. It trades about 0.05 of its potential returns per unit of risk. Dividend 15 Split is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  407.00  in Dividend 15 Split on September 19, 2024 and sell it today you would earn a total of  218.00  from holding Dividend 15 Split or generate 53.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Brookfield Infrastructure Part  vs.  Dividend 15 Split

Brookfield Infrastructure

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Brookfield Infrastructure Partners are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Brookfield Infrastructure is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Dividend 15 Split

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dividend 15 Split are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Dividend may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Brookfield Infrastructure and Dividend

The main advantage of trading using opposite Brookfield Infrastructure and Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Infrastructure position performs unexpectedly, Dividend 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 Dividend will offset losses from the drop in Dividend's long position.

The idea behind Brookfield Infrastructure Partners and Dividend 15 Split pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.