Correlation Between Centrais Electricas and Brookfield Renewable
Can any of the company-specific risk be diversified away by investing in both Centrais Electricas and Brookfield 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 Centrais Electricas and Brookfield Renewable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centrais Electricas Brasileiras and Brookfield Renewable Corp, you can compare the effects of market volatilities on Centrais Electricas and Brookfield 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 Centrais Electricas with a short position of Brookfield Renewable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centrais Electricas and Brookfield Renewable.
Diversification Opportunities for Centrais Electricas and Brookfield Renewable
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Centrais and Brookfield is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Centrais Electricas Brasileira and Brookfield Renewable Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Renewable Corp and Centrais Electricas 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 Centrais Electricas Brasileiras are associated (or correlated) with Brookfield Renewable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield Renewable Corp has no effect on the direction of Centrais Electricas i.e., Centrais Electricas and Brookfield Renewable go up and down completely randomly.
Pair Corralation between Centrais Electricas and Brookfield Renewable
Considering the 90-day investment horizon Centrais Electricas Brasileiras is expected to under-perform the Brookfield Renewable. But the stock apears to be less risky and, when comparing its historical volatility, Centrais Electricas Brasileiras is 1.02 times less risky than Brookfield Renewable. The stock trades about -0.02 of its potential returns per unit of risk. The Brookfield Renewable Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,836 in Brookfield Renewable Corp on August 30, 2024 and sell it today you would earn a total of 432.00 from holding Brookfield Renewable Corp or generate 15.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centrais Electricas Brasileira vs. Brookfield Renewable Corp
Performance |
| Timeline |
| Centrais Electricas |
| Brookfield Renewable Corp |
Centrais Electricas and Brookfield Renewable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centrais Electricas and Brookfield Renewable
The main advantage of trading using opposite Centrais Electricas and Brookfield Renewable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centrais Electricas position performs unexpectedly, Brookfield 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 Brookfield Renewable will offset losses from the drop in Brookfield Renewable's long position.| Centrais Electricas vs. Genie Energy | Centrais Electricas vs. Central Puerto SA | Centrais Electricas vs. Korea Electric Power | Centrais Electricas vs. Empresa Distribuidora y |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |