Correlation Between Beijing Energy and Brookfield Renewable
Can any of the company-specific risk be diversified away by investing in both Beijing Energy 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 Beijing Energy and Brookfield Renewable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beijing Energy International and Brookfield Renewable Partners, you can compare the effects of market volatilities on Beijing Energy 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 Beijing Energy with a short position of Brookfield Renewable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Energy and Brookfield Renewable.
Diversification Opportunities for Beijing Energy and Brookfield Renewable
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Beijing and Brookfield is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Energy International and Brookfield Renewable Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Renewable and Beijing Energy 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 Beijing Energy International 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 Beijing Energy i.e., Beijing Energy and Brookfield Renewable go up and down completely randomly.
Pair Corralation between Beijing Energy and Brookfield Renewable
Assuming the 90 days horizon Beijing Energy International is expected to generate 1.45 times more return on investment than Brookfield Renewable. However, Beijing Energy is 1.45 times more volatile than Brookfield Renewable Partners. It trades about 0.1 of its potential returns per unit of risk. Brookfield Renewable Partners is currently generating about -0.01 per unit of risk. If you would invest 2.61 in Beijing Energy International on August 30, 2024 and sell it today you would earn a total of 1.09 from holding Beijing Energy International or generate 41.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Energy International vs. Brookfield Renewable Partners
Performance |
| Timeline |
| Beijing Energy Inter |
| Brookfield Renewable |
Beijing Energy and Brookfield Renewable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Energy and Brookfield Renewable
The main advantage of trading using opposite Beijing Energy and Brookfield Renewable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Energy 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.| Beijing Energy vs. Atlantica Sustainable Infrastructure | Beijing Energy vs. Clearway Energy | Beijing Energy vs. Brookfield Renewable Corp | Beijing Energy vs. Nextera Energy Partners |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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