Correlation Between Brookfield Infrastructure and Moderna

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

Diversification Opportunities for Brookfield Infrastructure and Moderna

0.01
  Correlation Coefficient

Significant diversification

The 3 months correlation between Brookfield and Moderna is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Infrastructure Part and Moderna in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moderna 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 Moderna. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moderna has no effect on the direction of Brookfield Infrastructure i.e., Brookfield Infrastructure and Moderna go up and down completely randomly.

Pair Corralation between Brookfield Infrastructure and Moderna

Considering the 90-day investment horizon Brookfield Infrastructure is expected to generate 1230.88 times less return on investment than Moderna. But when comparing it to its historical volatility, Brookfield Infrastructure Partners is 1.3 times less risky than Moderna. It trades about 0.0 of its potential returns per unit of risk. Moderna is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest  14,862  in Moderna on September 3, 2022 and sell it today you would earn a total of  3,286  from holding Moderna or generate 22.11% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy95.45%
ValuesDaily Returns

Brookfield Infrastructure Part  vs.  Moderna

 Performance (%) 
       Timeline  
Brookfield Infrastructure 
Brookfield Performance
0 of 100
Over the last 90 days Brookfield Infrastructure Partners has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's forward indicators remain very healthy which may send shares a bit higher in January 2023. The recent disarray may also be a sign of long period up-swing for the firm insiders.

Brookfield Price Channel

Moderna 
Moderna Performance
12 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Moderna are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Moderna sustained solid returns over the last few months and may actually be approaching a breakup point.

Moderna Price Channel

Brookfield Infrastructure and Moderna Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Brookfield Infrastructure and Moderna

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

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