Correlation Between Brookfield Infrastructure and Titan Mining

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Can any of the company-specific risk be diversified away by investing in both Brookfield Infrastructure and Titan Mining 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 Titan Mining 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 Titan Mining Corp, you can compare the effects of market volatilities on Brookfield Infrastructure and Titan Mining 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 Titan Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Infrastructure and Titan Mining.

Diversification Opportunities for Brookfield Infrastructure and Titan Mining

0.76
  Correlation Coefficient

Poor diversification

The 3 months correlation between Brookfield and Titan is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Infrastructure Part and Titan Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Titan Mining Corp 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 Titan Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Titan Mining Corp has no effect on the direction of Brookfield Infrastructure i.e., Brookfield Infrastructure and Titan Mining go up and down completely randomly.

Pair Corralation between Brookfield Infrastructure and Titan Mining

Assuming the 90 days trading horizon Brookfield Infrastructure is expected to generate 2.6 times less return on investment than Titan Mining. But when comparing it to its historical volatility, Brookfield Infrastructure Partners is 9.83 times less risky than Titan Mining. It trades about 0.34 of its potential returns per unit of risk. Titan Mining Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  30.00  in Titan Mining Corp on January 22, 2024 and sell it today you would earn a total of  3.00  from holding Titan Mining Corp or generate 10.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Brookfield Infrastructure Part  vs.  Titan Mining Corp

 Performance 
       Timeline  
Brookfield Infrastructure 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Brookfield Infrastructure Partners are ranked lower than 1 (%) 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.
Titan Mining Corp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Titan Mining Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Titan Mining is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Brookfield Infrastructure and Titan Mining Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Brookfield Infrastructure and Titan Mining

The main advantage of trading using opposite Brookfield Infrastructure and Titan Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Infrastructure position performs unexpectedly, Titan Mining 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 Titan Mining will offset losses from the drop in Titan Mining's long position.
The idea behind Brookfield Infrastructure Partners and Titan Mining Corp 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.
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.

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