Correlation Between Aeluma and BrainChip Holdings
Can any of the company-specific risk be diversified away by investing in both Aeluma and BrainChip Holdings 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 Aeluma and BrainChip Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aeluma Inc and BrainChip Holdings, you can compare the effects of market volatilities on Aeluma and BrainChip Holdings 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 Aeluma with a short position of BrainChip Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeluma and BrainChip Holdings.
Diversification Opportunities for Aeluma and BrainChip Holdings
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aeluma and BrainChip is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Aeluma Inc and BrainChip Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BrainChip Holdings and Aeluma 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 Aeluma Inc are associated (or correlated) with BrainChip Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BrainChip Holdings has no effect on the direction of Aeluma i.e., Aeluma and BrainChip Holdings go up and down completely randomly.
Pair Corralation between Aeluma and BrainChip Holdings
Given the investment horizon of 90 days Aeluma Inc is expected to generate 1.04 times more return on investment than BrainChip Holdings. However, Aeluma is 1.04 times more volatile than BrainChip Holdings. It trades about -0.12 of its potential returns per unit of risk. BrainChip Holdings is currently generating about -0.27 per unit of risk. If you would invest 702.00 in Aeluma Inc on November 27, 2024 and sell it today you would lose (102.00) from holding Aeluma Inc or give up 14.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aeluma Inc vs. BrainChip Holdings
Performance |
| Timeline |
| Aeluma Inc |
| BrainChip Holdings |
Aeluma and BrainChip Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aeluma and BrainChip Holdings
The main advantage of trading using opposite Aeluma and BrainChip Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aeluma position performs unexpectedly, BrainChip Holdings 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 BrainChip Holdings will offset losses from the drop in BrainChip Holdings' long position.| Aeluma vs. Archer Materials Limited | Aeluma vs. Alphawave IP Group | Aeluma vs. BrainChip Holdings | Aeluma vs. Arteris |
| BrainChip Holdings vs. Skywater Technology | BrainChip Holdings vs. Everspin Technologies | BrainChip Holdings vs. 4DS Memory Limited | BrainChip Holdings vs. Weebit Nano Limited |
Check out your portfolio center.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 Stocks Directory module to find actively traded stocks across global markets.
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