Correlation Between Atlantic Power and Brookfield Renewable

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Can any of the company-specific risk be diversified away by investing in both Atlantic Power 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 Atlantic Power and Brookfield Renewable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atlantic Power and Brookfield Renewable Partners, you can compare the effects of market volatilities on Atlantic Power 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 Atlantic Power with a short position of Brookfield Renewable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlantic Power and Brookfield Renewable.

Diversification Opportunities for Atlantic Power and Brookfield Renewable

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Atlantic and Brookfield is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Atlantic Power and Brookfield Renewable Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Renewable and Atlantic Power 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 Atlantic Power 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 Atlantic Power i.e., Atlantic Power and Brookfield Renewable go up and down completely randomly.

Pair Corralation between Atlantic Power and Brookfield Renewable

If you would invest  2,247  in Brookfield Renewable Partners on December 29, 2023 and sell it today you would earn a total of  76.00  from holding Brookfield Renewable Partners or generate 3.38% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Atlantic Power  vs.  Brookfield Renewable Partners

 Performance 
       Timeline  
Atlantic Power 

Risk-Adjusted Performance

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Over the last 90 days Atlantic Power has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Atlantic Power is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.
Brookfield Renewable 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days Brookfield Renewable Partners has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest uncertain performance, the Stock's technical and fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Atlantic Power and Brookfield Renewable Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Atlantic Power and Brookfield Renewable

The main advantage of trading using opposite Atlantic Power and Brookfield Renewable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlantic Power 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.
The idea behind Atlantic Power and Brookfield Renewable Partners pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.

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