Correlation Between Brookfield Renewable and Brookfield Asset

Can any of the company-specific risk be diversified away by investing in both Brookfield Renewable and Brookfield Asset 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 Brookfield Renewable and Brookfield Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Brookfield Renewable Partners and Brookfield Asset Management, you can compare the effects of market volatilities on Brookfield Renewable and Brookfield Asset 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 Brookfield Renewable with a short position of Brookfield Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Renewable and Brookfield Asset.

Diversification Opportunities for Brookfield Renewable and Brookfield Asset

0.5

Correlation Coefficient

Brookfield Renewable  Brookfield Asset

Very weak diversification

The 3 months correlation between Brookfield and Brookfield is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Renewable Partners and Brookfield Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Asset Man and Brookfield Renewable 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 Brookfield Renewable Partners are associated (or correlated) with Brookfield Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield Asset Man has no effect on the direction of Brookfield Renewable i.e., Brookfield Renewable and Brookfield Asset go up and down completely randomly.

Pair Corralation between Brookfield Renewable and Brookfield Asset

Assuming the 90 days trading horizon Brookfield Renewable Partners is expected to generate 1.16 times more return on investment than Brookfield Asset. However, Brookfield Renewable is 1.16 times more volatile than Brookfield Asset Management. It trades about 0.17 of its potential returns per unit of risk. Brookfield Asset Management is currently generating about 0.14 per unit of risk. If you would invest  3,061  in Brookfield Renewable Partners on April 24, 2025 and sell it today you would earn a total of  659.00  from holding Brookfield Renewable Partners or generate 21.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Brookfield Renewable Partners  vs.  Brookfield Asset Management

Brookfield Renewable

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Brookfield Renewable Partners are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Brookfield Renewable sustained solid returns over the last few months and may actually be approaching a breakup point.

Brookfield Asset Man

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Brookfield Asset Management are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating primary indicators, Brookfield Asset displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Brookfield Renewable and Brookfield Asset

The main advantage of trading using opposite Brookfield Renewable and Brookfield Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookfield Renewable position performs unexpectedly, Brookfield Asset 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 Asset will offset losses from the drop in Brookfield Asset's long position.

The idea behind Brookfield Renewable Partners and Brookfield Asset Management 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .