Correlation Between Chesapeake Utilities and Brookfield Renewable

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

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

Diversification Opportunities for Chesapeake Utilities and Brookfield Renewable

-0.38

Correlation Coefficient

Chesapeake Utilities  Brookfield Renewable

Very good diversification

The 3 months correlation between Chesapeake and Brookfield is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Utilities and Brookfield Renewable Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Renewable Corp and Chesapeake Utilities 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 Chesapeake Utilities 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 Corp has no effect on the direction of Chesapeake Utilities i.e., Chesapeake Utilities and Brookfield Renewable go up and down completely randomly.

Pair Corralation between Chesapeake Utilities and Brookfield Renewable

Considering the 90-day investment horizon Chesapeake Utilities is expected to under-perform the Brookfield Renewable. But the stock apears to be less risky and, when comparing its historical volatility, Chesapeake Utilities is 1.55 times less risky than Brookfield Renewable. The stock trades about -0.1 of its potential returns per unit of risk. The Brookfield Renewable Corp is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  2,702  in Brookfield Renewable Corp on May 4, 2025 and sell it today you would earn a total of  684.00  from holding Brookfield Renewable Corp or generate 25.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Chesapeake Utilities  vs.  Brookfield Renewable Corp

Chesapeake Utilities

Risk-Adjusted Performance

Very Weak

Over the last 90 days Chesapeake Utilities has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Brookfield Renewable Corp

Risk-Adjusted Performance

Good

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

Pair Trading with Chesapeake Utilities and Brookfield Renewable

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