Correlation Between Huaneng Power and Brookfield Renewable

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

Diversification Opportunities for Huaneng Power and Brookfield Renewable

0.0

Correlation Coefficient

Huaneng Power  Brookfield Renewable

Pay attention - limited upside

The 3 months correlation between Huaneng and Brookfield is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Huaneng Power 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 Huaneng 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 Huaneng Power 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 Huaneng Power i.e., Huaneng Power and Brookfield Renewable go up and down completely randomly.

Pair Corralation between Huaneng Power and Brookfield Renewable

If you would invest (100.00) in Huaneng Power International on February 1, 2024 and sell it today you would earn a total of  100.00  from holding Huaneng Power International or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Huaneng Power International  vs.  Brookfield Renewable Partners

Huaneng Power Intern

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Huaneng Power International has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Huaneng Power is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Brookfield Renewable

Risk-Adjusted Performance

0 of 100

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 uncertain performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in June 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Huaneng Power and Brookfield Renewable

The main advantage of trading using opposite Huaneng Power and Brookfield Renewable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huaneng 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 Huaneng Power International 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.