Correlation Between Brookfield Renewable and Vast Renewables
Can any of the company-specific risk be diversified away by investing in both Brookfield Renewable and Vast Renewables 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 Renewable and Vast Renewables into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brookfield Renewable Partners and Vast Renewables Limited, you can compare the effects of market volatilities on Brookfield Renewable and Vast Renewables 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 Renewable with a short position of Vast Renewables. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Renewable and Vast Renewables.
Diversification Opportunities for Brookfield Renewable and Vast Renewables
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Brookfield and Vast is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Renewable Partners and Vast Renewables Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vast Renewables and Brookfield Renewable 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 Renewable Partners are associated (or correlated) with Vast Renewables. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vast Renewables has no effect on the direction of Brookfield Renewable i.e., Brookfield Renewable and Vast Renewables go up and down completely randomly.
Pair Corralation between Brookfield Renewable and Vast Renewables
Assuming the 90 days trading horizon Brookfield Renewable Partners is expected to under-perform the Vast Renewables. But the preferred stock apears to be less risky and, when comparing its historical volatility, Brookfield Renewable Partners is 15.19 times less risky than Vast Renewables. The preferred stock trades about -0.17 of its potential returns per unit of risk. The Vast Renewables Limited is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 4.58 in Vast Renewables Limited on August 24, 2024 and sell it today you would earn a total of 1.45 from holding Vast Renewables Limited or generate 31.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Brookfield Renewable Partners vs. Vast Renewables Limited
Performance |
| Timeline |
| Brookfield Renewable |
| Vast Renewables |
Brookfield Renewable and Vast Renewables Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Renewable and Vast Renewables
The main advantage of trading using opposite Brookfield Renewable and Vast Renewables positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Renewable position performs unexpectedly, Vast Renewables 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 Vast Renewables will offset losses from the drop in Vast Renewables' long position.| Brookfield Renewable vs. Brookfield Infrastructure Partners | Brookfield Renewable vs. Brookfield Infrastructure Partners | Brookfield Renewable vs. Entergy Texas | Brookfield Renewable vs. Duke Energy |
| Vast Renewables vs. BRP Inc | Vast Renewables vs. Proficient Auto Logistics, | Vast Renewables vs. Sonos Inc | Vast Renewables vs. Old Dominion Freight |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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