Correlation Between Brookfield Infrastructure and Dominion Energy

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Brookfield Infrastructure and Dominion Energy 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 Dominion Energy 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 Dominion Energy, you can compare the effects of market volatilities on Brookfield Infrastructure and Dominion Energy 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 Dominion Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Infrastructure and Dominion Energy.

Diversification Opportunities for Brookfield Infrastructure and Dominion Energy

-0.4
  Correlation Coefficient

Very good diversification

The 3 months correlation between Brookfield and Dominion is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Infrastructure Part and Dominion Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dominion Energy 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 Dominion Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dominion Energy has no effect on the direction of Brookfield Infrastructure i.e., Brookfield Infrastructure and Dominion Energy go up and down completely randomly.

Pair Corralation between Brookfield Infrastructure and Dominion Energy

Considering the 90-day investment horizon Brookfield Infrastructure Partners is expected to generate 0.79 times more return on investment than Dominion Energy. However, Brookfield Infrastructure Partners is 1.26 times less risky than Dominion Energy. It trades about 0.32 of its potential returns per unit of risk. Dominion Energy is currently generating about 0.07 per unit of risk. If you would invest  2,764  in Brookfield Infrastructure Partners on December 30, 2023 and sell it today you would earn a total of  357.00  from holding Brookfield Infrastructure Partners or generate 12.92% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Brookfield Infrastructure Part  vs.  Dominion Energy

 Performance 
       Timeline  
Brookfield Infrastructure 

Risk-Adjusted Performance

1 of 100

 
Low
 
High
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. Even with relatively invariable forward indicators, Brookfield Infrastructure is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.
Dominion Energy 

Risk-Adjusted Performance

2 of 100

 
Low
 
High
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Dominion Energy are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Dominion Energy is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Brookfield Infrastructure and Dominion Energy Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Brookfield Infrastructure and Dominion Energy

The main advantage of trading using opposite Brookfield Infrastructure and Dominion Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Infrastructure position performs unexpectedly, Dominion Energy 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 Dominion Energy will offset losses from the drop in Dominion Energy's long position.
The idea behind Brookfield Infrastructure Partners and Dominion Energy 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

Other Complementary Tools

Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Piotroski F Score
Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals
Correlation Analysis
Reduce portfolio risk simply by holding instruments which are not perfectly correlated
ETF Categories
List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments
Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk