Correlation Between NiSource and Brookfield Renewable
Can any of the company-specific risk be diversified away by investing in both NiSource 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 NiSource and Brookfield Renewable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NiSource and Brookfield Renewable Partners, you can compare the effects of market volatilities on NiSource 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 NiSource with a short position of Brookfield Renewable. Check out your portfolio center. Please also check ongoing floating volatility patterns of NiSource and Brookfield Renewable.
Diversification Opportunities for NiSource and Brookfield Renewable
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NiSource and Brookfield is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding NiSource and Brookfield Renewable Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Renewable and NiSource 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 NiSource 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 NiSource i.e., NiSource and Brookfield Renewable go up and down completely randomly.
Pair Corralation between NiSource and Brookfield Renewable
Allowing for the 90-day total investment horizon NiSource is expected to generate 2.32 times more return on investment than Brookfield Renewable. However, NiSource is 2.32 times more volatile than Brookfield Renewable Partners. It trades about 0.29 of its potential returns per unit of risk. Brookfield Renewable Partners is currently generating about 0.2 per unit of risk. If you would invest 3,504 in NiSource on August 24, 2024 and sell it today you would earn a total of 281.00 from holding NiSource or generate 8.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NiSource vs. Brookfield Renewable Partners
Performance |
| Timeline |
| NiSource |
| Brookfield Renewable |
NiSource and Brookfield Renewable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NiSource and Brookfield Renewable
The main advantage of trading using opposite NiSource and Brookfield Renewable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NiSource 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.| NiSource vs. NewJersey Resources | NiSource vs. Northwest Natural Gas | NiSource vs. UGI Corporation | NiSource vs. Spire Inc |
| 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |