Correlation Between Brookfield Infrastructure and Avangrid
Can any of the company-specific risk be diversified away by investing in both Brookfield Infrastructure and Avangrid 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 Avangrid 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 Avangrid, you can compare the effects of market volatilities on Brookfield Infrastructure and Avangrid 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 Avangrid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Infrastructure and Avangrid.
Diversification Opportunities for Brookfield Infrastructure and Avangrid
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Brookfield and Avangrid is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Infrastructure Part and Avangrid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avangrid 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 Avangrid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avangrid has no effect on the direction of Brookfield Infrastructure i.e., Brookfield Infrastructure and Avangrid go up and down completely randomly.
Pair Corralation between Brookfield Infrastructure and Avangrid
Considering the 90-day investment horizon Brookfield Infrastructure Partners is expected to under-perform the Avangrid. In addition to that, Brookfield Infrastructure is 3.8 times more volatile than Avangrid. It trades about -0.09 of its total potential returns per unit of risk. Avangrid is currently generating about 0.22 per unit of volatility. If you would invest 3,576 in Avangrid on January 23, 2024 and sell it today you would earn a total of 111.00 from holding Avangrid or generate 3.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brookfield Infrastructure Part vs. Avangrid
Performance |
| Timeline |
| Brookfield Infrastructure |
| Avangrid |
Brookfield Infrastructure and Avangrid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Infrastructure and Avangrid
The main advantage of trading using opposite Brookfield Infrastructure and Avangrid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Infrastructure position performs unexpectedly, Avangrid 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 Avangrid will offset losses from the drop in Avangrid's long position.| Brookfield Infrastructure vs. Allete Inc | Brookfield Infrastructure vs. Black Hills | Brookfield Infrastructure vs. Otter Tail | Brookfield Infrastructure vs. Companhia Paranaense de |
| Avangrid vs. Centrais Eltricas Brasileiras | Avangrid vs. Central Puerto SA | Avangrid vs. CMS Energy | Avangrid vs. Centrais Electricas Brasileiras |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |