Correlation Between Hawaiian Electric and Brookfield Renewable
Can any of the company-specific risk be diversified away by investing in both Hawaiian Electric 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 Hawaiian Electric and Brookfield Renewable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hawaiian Electric Industries and Brookfield Renewable Partners, you can compare the effects of market volatilities on Hawaiian Electric 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 Hawaiian Electric with a short position of Brookfield Renewable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hawaiian Electric and Brookfield Renewable.
Diversification Opportunities for Hawaiian Electric and Brookfield Renewable
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hawaiian and Brookfield is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Hawaiian Electric Industries and Brookfield Renewable Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Renewable and Hawaiian Electric 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 Hawaiian Electric Industries 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 Hawaiian Electric i.e., Hawaiian Electric and Brookfield Renewable go up and down completely randomly.
Pair Corralation between Hawaiian Electric and Brookfield Renewable
Allowing for the 90-day total investment horizon Hawaiian Electric Industries is expected to under-perform the Brookfield Renewable. In addition to that, Hawaiian Electric is 2.23 times more volatile than Brookfield Renewable Partners. It trades about -0.03 of its total potential returns per unit of risk. Brookfield Renewable Partners is currently generating about 0.01 per unit of volatility. If you would invest 2,460 in Brookfield Renewable Partners on August 30, 2024 and sell it today you would earn a total of 112.00 from holding Brookfield Renewable Partners or generate 4.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Hawaiian Electric Industries vs. Brookfield Renewable Partners
Performance |
| Timeline |
| Hawaiian Electric |
| Brookfield Renewable |
Hawaiian Electric and Brookfield Renewable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hawaiian Electric and Brookfield Renewable
The main advantage of trading using opposite Hawaiian Electric and Brookfield Renewable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hawaiian Electric 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.| Hawaiian Electric vs. DTE Energy | Hawaiian Electric vs. Alliant Energy Corp | Hawaiian Electric vs. Ameren Corp | Hawaiian Electric vs. CenterPoint 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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