Correlation Between Brookfield Renewable and Fusion Fuel
Can any of the company-specific risk be diversified away by investing in both Brookfield Renewable and Fusion Fuel 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 Fusion Fuel 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 Fusion Fuel Green, you can compare the effects of market volatilities on Brookfield Renewable and Fusion Fuel 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 Fusion Fuel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Renewable and Fusion Fuel.
Diversification Opportunities for Brookfield Renewable and Fusion Fuel
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Brookfield and Fusion is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Renewable Corp and Fusion Fuel Green in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fusion Fuel Green 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 Fusion Fuel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fusion Fuel Green has no effect on the direction of Brookfield Renewable i.e., Brookfield Renewable and Fusion Fuel go up and down completely randomly.
Pair Corralation between Brookfield Renewable and Fusion Fuel
Given the investment horizon of 90 days Brookfield Renewable Corp is expected to generate 0.14 times more return on investment than Fusion Fuel. However, Brookfield Renewable Corp is 6.99 times less risky than Fusion Fuel. It trades about -0.17 of its potential returns per unit of risk. Fusion Fuel Green is currently generating about -0.08 per unit of risk. If you would invest 2,901 in Brookfield Renewable Corp on November 5, 2024 and sell it today you would lose (232.00) from holding Brookfield Renewable Corp or give up 8.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brookfield Renewable Corp vs. Fusion Fuel Green
Performance |
| Timeline |
| Brookfield Renewable Corp |
| Fusion Fuel Green |
Brookfield Renewable and Fusion Fuel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookfield Renewable and Fusion Fuel
The main advantage of trading using opposite Brookfield Renewable and Fusion Fuel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Renewable position performs unexpectedly, Fusion Fuel 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 Fusion Fuel will offset losses from the drop in Fusion Fuel'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 |
| Fusion Fuel vs. Fusion Fuel Green | Fusion Fuel vs. Advent Technologies Holdings | Fusion Fuel vs. Eos Energy Enterprises | Fusion Fuel vs. CuriosityStream |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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