Correlation Between Brookfield Renewable and Innergex Renewable
Can any of the company-specific risk be diversified away by investing in both Brookfield Renewable and Innergex Renewable 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 Innergex Renewable 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 Innergex Renewable Energy, you can compare the effects of market volatilities on Brookfield Renewable and Innergex Renewable 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 Innergex Renewable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Renewable and Innergex Renewable.
Diversification Opportunities for Brookfield Renewable and Innergex Renewable
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Brookfield and Innergex is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Renewable Partners and Innergex Renewable Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innergex Renewable Energy 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 Innergex Renewable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innergex Renewable Energy has no effect on the direction of Brookfield Renewable i.e., Brookfield Renewable and Innergex Renewable go up and down completely randomly.
Pair Corralation between Brookfield Renewable and Innergex Renewable
Assuming the 90 days trading horizon Brookfield Renewable Partners is expected to generate 1.33 times more return on investment than Innergex Renewable. However, Brookfield Renewable is 1.33 times more volatile than Innergex Renewable Energy. It trades about -0.15 of its potential returns per unit of risk. Innergex Renewable Energy is currently generating about -0.38 per unit of risk. If you would invest 3,780 in Brookfield Renewable Partners on August 27, 2024 and sell it today you would lose (261.00) from holding Brookfield Renewable Partners or give up 6.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brookfield Renewable Partners vs. Innergex Renewable Energy
Performance |
| Timeline |
| Brookfield Renewable |
| Innergex Renewable Energy |
Brookfield Renewable and Innergex Renewable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Renewable and Innergex Renewable
The main advantage of trading using opposite Brookfield Renewable and Innergex Renewable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Renewable position performs unexpectedly, Innergex Renewable 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 Innergex Renewable will offset losses from the drop in Innergex Renewable's long position.| Brookfield Renewable vs. Brookfield Infrastructure Partners | Brookfield Renewable vs. Algonquin Power Utilities | Brookfield Renewable vs. Northland Power | Brookfield Renewable vs. Fortis Inc |
| Innergex Renewable vs. Boralex | Innergex Renewable vs. Capital Power | Innergex Renewable vs. Brookfield Renewable Partners |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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