Correlation Between Ellomay Capital and Brookfield Renewable
Can any of the company-specific risk be diversified away by investing in both Ellomay Capital 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 Ellomay Capital and Brookfield Renewable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ellomay Capital and Brookfield Renewable Partners, you can compare the effects of market volatilities on Ellomay Capital 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 Ellomay Capital with a short position of Brookfield Renewable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ellomay Capital and Brookfield Renewable.
Diversification Opportunities for Ellomay Capital and Brookfield Renewable
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ellomay and Brookfield is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Ellomay Capital and Brookfield Renewable Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Renewable and Ellomay Capital 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 Ellomay Capital 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 has no effect on the direction of Ellomay Capital i.e., Ellomay Capital and Brookfield Renewable go up and down completely randomly.
Pair Corralation between Ellomay Capital and Brookfield Renewable
Given the investment horizon of 90 days Ellomay Capital is expected to generate 5.36 times more return on investment than Brookfield Renewable. However, Ellomay Capital is 5.36 times more volatile than Brookfield Renewable Partners. It trades about 0.28 of its potential returns per unit of risk. Brookfield Renewable Partners is currently generating about 0.11 per unit of risk. If you would invest 1,395 in Ellomay Capital on August 28, 2024 and sell it today you would earn a total of 254.00 from holding Ellomay Capital or generate 18.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ellomay Capital vs. Brookfield Renewable Partners
Performance |
| Timeline |
| Ellomay Capital |
| Brookfield Renewable |
Ellomay Capital and Brookfield Renewable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ellomay Capital and Brookfield Renewable
The main advantage of trading using opposite Ellomay Capital and Brookfield Renewable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ellomay Capital 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.| Ellomay Capital vs. Enlight Renewable Energy | Ellomay Capital vs. Renew Energy Global | Ellomay Capital vs. Clearway Energy Class | Ellomay Capital vs. Excelerate Energy |
| Brookfield Renewable vs. Consumers Energy | Brookfield Renewable vs. CMS Energy | Brookfield Renewable vs. Cadiz Depositary Shares | Brookfield Renewable vs. DTE Energy |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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