Correlation Between Brookfield Renewable and Altus Power
Can any of the company-specific risk be diversified away by investing in both Brookfield Renewable and Altus Power 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 Altus Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brookfield Renewable Corp and Altus Power, you can compare the effects of market volatilities on Brookfield Renewable and Altus Power 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 Altus Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Renewable and Altus Power.
Diversification Opportunities for Brookfield Renewable and Altus Power
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Brookfield and Altus is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Renewable Corp and Altus Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altus Power 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 Corp are associated (or correlated) with Altus Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altus Power has no effect on the direction of Brookfield Renewable i.e., Brookfield Renewable and Altus Power go up and down completely randomly.
Pair Corralation between Brookfield Renewable and Altus Power
Given the investment horizon of 90 days Brookfield Renewable Corp is expected to under-perform the Altus Power. But the stock apears to be less risky and, when comparing its historical volatility, Brookfield Renewable Corp is 2.69 times less risky than Altus Power. The stock trades about -0.13 of its potential returns per unit of risk. The Altus Power is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 354.00 in Altus Power on November 2, 2024 and sell it today you would earn a total of 56.00 from holding Altus Power or generate 15.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brookfield Renewable Corp vs. Altus Power
Performance |
| Timeline |
| Brookfield Renewable Corp |
| Altus Power |
Brookfield Renewable and Altus Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Renewable and Altus Power
The main advantage of trading using opposite Brookfield Renewable and Altus Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Renewable position performs unexpectedly, Altus Power 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 Altus Power will offset losses from the drop in Altus Power's long position.| Brookfield Renewable vs. Nextera Energy Partners | Brookfield Renewable vs. Algonquin Power Utilities | Brookfield Renewable vs. Clearway Energy Class | Brookfield Renewable vs. Clearway Energy |
| Altus Power vs. Ormat Technologies | Altus Power vs. Enlight Renewable Energy | Altus Power vs. Fluence Energy | Altus Power vs. Renew Energy Global |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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