Correlation Between Hemisphere Energy and Brookfield Renewable

Can any of the company-specific risk be diversified away by investing in both Hemisphere 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 Hemisphere 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 Hemisphere Energy and Brookfield Renewable Partners, you can compare the effects of market volatilities on Hemisphere 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 Hemisphere Energy with a short position of Brookfield Renewable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hemisphere Energy and Brookfield Renewable.

Diversification Opportunities for Hemisphere Energy and Brookfield Renewable

0.91

Correlation Coefficient

Hemisphere Energy  Brookfield Renewable

Almost no diversification

The 3 months correlation between Hemisphere and Brookfield is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Hemisphere Energy and Brookfield Renewable Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Renewable and Hemisphere 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 Hemisphere Energy 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 Hemisphere Energy i.e., Hemisphere Energy and Brookfield Renewable go up and down completely randomly.

Pair Corralation between Hemisphere Energy and Brookfield Renewable

Assuming the 90 days horizon Hemisphere Energy is expected to generate 1.68 times less return on investment than Brookfield Renewable. But when comparing it to its historical volatility, Hemisphere Energy is 1.36 times less risky than Brookfield Renewable. It trades about 0.14 of its potential returns per unit of risk. Brookfield Renewable Partners is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  3,096  in Brookfield Renewable Partners on April 25, 2025 and sell it today you would earn a total of  653.00  from holding Brookfield Renewable Partners or generate 21.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Hemisphere Energy  vs.  Brookfield Renewable Partners

Hemisphere Energy

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hemisphere Energy are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Hemisphere Energy may actually be approaching a critical reversion point that can send shares even higher in August 2025.

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.

Pair Trading with Hemisphere Energy and Brookfield Renewable

The main advantage of trading using opposite Hemisphere Energy and Brookfield Renewable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hemisphere 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.

The idea behind Hemisphere Energy 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.