Correlation Between Canadian Utilities and Brookfield Infrastructure
Can any of the company-specific risk be diversified away by investing in both Canadian Utilities 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 Canadian Utilities and Brookfield Infrastructure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canadian Utilities Limited and Brookfield Infrastructure Partners, you can compare the effects of market volatilities on Canadian Utilities 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 Canadian Utilities with a short position of Brookfield Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Utilities and Brookfield Infrastructure.
Diversification Opportunities for Canadian Utilities and Brookfield Infrastructure
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Canadian and Brookfield is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Utilities Limited and Brookfield Infrastructure Part in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Infrastructure and Canadian Utilities 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 Canadian Utilities Limited 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 Canadian Utilities i.e., Canadian Utilities and Brookfield Infrastructure go up and down completely randomly.
Pair Corralation between Canadian Utilities and Brookfield Infrastructure
Assuming the 90 days trading horizon Canadian Utilities is expected to generate 18.65 times less return on investment than Brookfield Infrastructure. But when comparing it to its historical volatility, Canadian Utilities Limited is 1.22 times less risky than Brookfield Infrastructure. It trades about 0.02 of its potential returns per unit of risk. Brookfield Infrastructure Partners is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 4,205 in Brookfield Infrastructure Partners on September 4, 2025 and sell it today you would earn a total of 871.00 from holding Brookfield Infrastructure Partners or generate 20.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian Utilities Limited vs. Brookfield Infrastructure Part
Performance |
| Timeline |
| Canadian Utilities |
| Brookfield Infrastructure |
Canadian Utilities and Brookfield Infrastructure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Utilities and Brookfield Infrastructure
The main advantage of trading using opposite Canadian Utilities and Brookfield Infrastructure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Utilities 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.| Canadian Utilities vs. Plaza Retail REIT | Canadian Utilities vs. Dream Office Real | Canadian Utilities vs. Plantify Foods | Canadian Utilities vs. Mogotes Metals |
| Brookfield Infrastructure vs. Nexoptic Technology Corp | Brookfield Infrastructure vs. Precious Metals And | Brookfield Infrastructure vs. Sparx Technology | Brookfield Infrastructure vs. Quipt Home Medical |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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