Correlation Between Brookfield Infrastructure and Credit Suisse

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

Diversification Opportunities for Brookfield Infrastructure and Credit Suisse

-0.58

Correlation Coefficient

Brookfield Infrastructure  Credit Suisse

Excellent diversification

The 3 months correlation between Brookfield and Credit is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Infrastructure Part and Credit Suisse Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Suisse Group 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 Credit Suisse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Credit Suisse Group has no effect on the direction of Brookfield Infrastructure i.e., Brookfield Infrastructure and Credit Suisse go up and down completely randomly.

Pair Corralation between Brookfield Infrastructure and Credit Suisse

If you would invest  1,790  in Brookfield Infrastructure Partners on September 6, 2024 and sell it today you would earn a total of  96.00  from holding Brookfield Infrastructure Partners or generate 5.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

Brookfield Infrastructure Part  vs.  Credit Suisse Group

Brookfield Infrastructure

Risk-Adjusted Performance

5 of 100

Modest

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 current stock price disturbance, may contribute to short-term losses for the investors.

Credit Suisse Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Credit Suisse Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward-looking signals, Credit Suisse is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Brookfield Infrastructure and Credit Suisse

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

The idea behind Brookfield Infrastructure Partners and Credit Suisse Group 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.