Correlation Between Brookfield Infrastructure and Precision Drilling

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

Diversification Opportunities for Brookfield Infrastructure and Precision Drilling

0.55

Correlation Coefficient

Brookfield Infrastructure  Precision Drilling

Very weak diversification

The 3 months correlation between Brookfield and Precision is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Infrastructure Part and Precision Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Precision Drilling 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 Precision Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Precision Drilling has no effect on the direction of Brookfield Infrastructure i.e., Brookfield Infrastructure and Precision Drilling go up and down completely randomly.

Pair Corralation between Brookfield Infrastructure and Precision Drilling

Assuming the 90 days trading horizon Brookfield Infrastructure Partners is expected to generate 0.2 times more return on investment than Precision Drilling. However, Brookfield Infrastructure Partners is 5.0 times less risky than Precision Drilling. It trades about 0.09 of its potential returns per unit of risk. Precision Drilling is currently generating about -0.12 per unit of risk. If you would invest  2,506  in Brookfield Infrastructure Partners on July 22, 2025 and sell it today you would earn a total of  16.00  from holding Brookfield Infrastructure Partners or generate 0.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Brookfield Infrastructure Part  vs.  Precision Drilling

Brookfield Infrastructure

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Brookfield Infrastructure Partners are ranked lower than 5 (%) 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.

Precision Drilling

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Precision Drilling are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Precision Drilling may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Pair Trading with Brookfield Infrastructure and Precision Drilling

The main advantage of trading using opposite Brookfield Infrastructure and Precision Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Infrastructure position performs unexpectedly, Precision Drilling 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 Precision Drilling will offset losses from the drop in Precision Drilling's long position.

The idea behind Brookfield Infrastructure Partners and Precision Drilling 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.

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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.