27.23 +0.2 (+0.74%) Sell

Profit booking on the minds of BEP investors as it shows marginal outperformance

13 min read

BROOKFIELD RENEWABLE PARTNERS L.P. (Foreign) was among the best performers today. It returned +0.74% to close at 27.23. During the last week it returned +0.22% and saw a maximum drawdown of -0.63% before bouncing back.

[Themes containing BEP]

BEP is currently in a down trend. The current bearish signal has generated a profit of +7.13% for investors in the last three months.


BEP has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 10 days, BEP underperformed the SP500 index on 49% days. Which indicates that on days BEP underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months BEP was mostly loss making and delivered on average -0.21% per day. It's best return during this period (of +2.22%) was on Wednesday, 21 Nov, 2018. While it's worst loss in the same period (of -2.61%) was on Monday, 24 Sep, 2018. There was initially a bearish trend during this period which started on 23 Oct, 2018 and went on till 31 Oct, 2018. The trend delivered -6.9% losses to investors. This was followed by a bullish trend that started on 1 Nov, 2018 and ended on 7 Nov, 2018. This bullish trend delivered +4.96% to investors.

On monthly basis, BEP delivered losses in more months over the last year, than profits. BEP delivered profits less regularly than SP500 index. BEP was also a more risky investment than SP500 index as it's worst month in the last year, Oct 2018, returned -11.06% compared to -7.28% returned by SP500 index in Oct 2018. BEP and SP500 index, both had periods of 2 consecutive losing months.

"Watch your finances like a hawk.

BEP is becoming less volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in BEP's volatility from 19 Sep, 2018 to 1 Nov, 2018. While there was a significant surge in the SP500 index's volatility from 25 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that BEP has negative skewness in it's return distribution. This indicates that investors may need to stay invested through long periods of drawdown before expecting a recovery.

BEP has more chance of extreme outcomes than the SP500 index. Therefore, BEP must receive a lower allocation than SP500 in your portfolio. SP500 index usually has shorter drawdown period than BEP.

On a general note (since you are interested in BEP), two instruments that have been extremely volatile in recent times are IX and OPNT. Investors in these instruments should consider reducing their exposure (to IX and OPNT) and diversifying their portfolios.

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