Correlation Between Brait SE and Allied Electronics
Can any of the company-specific risk be diversified away by investing in both Brait SE and Allied Electronics 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 Brait SE and Allied Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brait SE and Allied Electronics, you can compare the effects of market volatilities on Brait SE and Allied Electronics 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 Brait SE with a short position of Allied Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brait SE and Allied Electronics.
Diversification Opportunities for Brait SE and Allied Electronics
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Brait and Allied is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Brait SE and Allied Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allied Electronics and Brait SE 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 Brait SE are associated (or correlated) with Allied Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allied Electronics has no effect on the direction of Brait SE i.e., Brait SE and Allied Electronics go up and down completely randomly.
Pair Corralation between Brait SE and Allied Electronics
Assuming the 90 days trading horizon Brait SE is expected to generate 1.21 times more return on investment than Allied Electronics. However, Brait SE is 1.21 times more volatile than Allied Electronics. It trades about 0.44 of its potential returns per unit of risk. Allied Electronics is currently generating about 0.23 per unit of risk. If you would invest 16,000 in Brait SE on August 27, 2024 and sell it today you would earn a total of 3,600 from holding Brait SE or generate 22.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brait SE vs. Allied Electronics
Performance |
| Timeline |
| Brait SE |
| Allied Electronics |
Brait SE and Allied Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brait SE and Allied Electronics
The main advantage of trading using opposite Brait SE and Allied Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brait SE position performs unexpectedly, Allied Electronics 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 Allied Electronics will offset losses from the drop in Allied Electronics' long position.| Brait SE vs. Allied Electronics | Brait SE vs. Bytes Technology | Brait SE vs. eMedia Holdings Limited | Brait SE vs. We Buy Cars |
| Allied Electronics vs. Ayo Technology Solutions | Allied Electronics vs. Centaur Bci Balanced | Allied Electronics vs. Growthpoint Properties | Allied Electronics vs. Bowler Metcalf |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |