Correlation Between CenterPoint Energy and Brookfield Infrastructure
Can any of the company-specific risk be diversified away by investing in both CenterPoint Energy 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 CenterPoint Energy and Brookfield Infrastructure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CenterPoint Energy and Brookfield Infrastructure Partners, you can compare the effects of market volatilities on CenterPoint Energy 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 CenterPoint Energy with a short position of Brookfield Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of CenterPoint Energy and Brookfield Infrastructure.
Diversification Opportunities for CenterPoint Energy and Brookfield Infrastructure
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between CenterPoint and Brookfield is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding CenterPoint Energy and Brookfield Infrastructure Part in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Infrastructure and CenterPoint Energy 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 CenterPoint Energy 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 CenterPoint Energy i.e., CenterPoint Energy and Brookfield Infrastructure go up and down completely randomly.
Pair Corralation between CenterPoint Energy and Brookfield Infrastructure
Considering the 90-day investment horizon CenterPoint Energy is expected to generate 0.55 times more return on investment than Brookfield Infrastructure. However, CenterPoint Energy is 1.81 times less risky than Brookfield Infrastructure. It trades about -0.01 of its potential returns per unit of risk. Brookfield Infrastructure Partners is currently generating about -0.22 per unit of risk. If you would invest 2,810 in CenterPoint Energy on January 20, 2024 and sell it today you would lose (15.00) from holding CenterPoint Energy or give up 0.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CenterPoint Energy vs. Brookfield Infrastructure Part
Performance |
| Timeline |
| CenterPoint Energy |
| Brookfield Infrastructure |
CenterPoint Energy and Brookfield Infrastructure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CenterPoint Energy and Brookfield Infrastructure
The main advantage of trading using opposite CenterPoint Energy and Brookfield Infrastructure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CenterPoint Energy 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.| CenterPoint Energy vs. American Electric Power | CenterPoint Energy vs. Nextera Energy | CenterPoint Energy vs. Aquagold International | CenterPoint Energy vs. Morningstar Unconstrained Allocation |
| Brookfield Infrastructure vs. Allete Inc | Brookfield Infrastructure vs. Black Hills | Brookfield Infrastructure vs. Otter Tail | Brookfield Infrastructure vs. Companhia Paranaense de |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |