Correlation Between Brookfield Renewable and UGI
Can any of the company-specific risk be diversified away by investing in both Brookfield Renewable and UGI 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 UGI 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 UGI Corporation, you can compare the effects of market volatilities on Brookfield Renewable and UGI 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 UGI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Renewable and UGI.
Diversification Opportunities for Brookfield Renewable and UGI
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Brookfield and UGI is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Renewable Partners and UGI Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UGI Corporation 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 UGI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UGI Corporation has no effect on the direction of Brookfield Renewable i.e., Brookfield Renewable and UGI go up and down completely randomly.
Pair Corralation between Brookfield Renewable and UGI
Considering the 90-day investment horizon Brookfield Renewable Partners is expected to under-perform the UGI. But the stock apears to be less risky and, when comparing its historical volatility, Brookfield Renewable Partners is 1.34 times less risky than UGI. The stock trades about -0.19 of its potential returns per unit of risk. The UGI Corporation is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 2,304 in UGI Corporation on November 2, 2024 and sell it today you would earn a total of 795.00 from holding UGI Corporation or generate 34.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brookfield Renewable Partners vs. UGI Corp.
Performance |
| Timeline |
| Brookfield Renewable |
| UGI Corporation |
Brookfield Renewable and UGI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Renewable and UGI
The main advantage of trading using opposite Brookfield Renewable and UGI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Renewable position performs unexpectedly, UGI 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 UGI will offset losses from the drop in UGI's long position.| Brookfield Renewable vs. Clearway Energy Class | Brookfield Renewable vs. Nextera Energy Partners | Brookfield Renewable vs. Algonquin Power Utilities | Brookfield Renewable vs. Brookfield Renewable Corp |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |