Correlation Between Brewbilt Manufacturing and Vestas Wind
Can any of the company-specific risk be diversified away by investing in both Brewbilt Manufacturing and Vestas Wind 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 Brewbilt Manufacturing and Vestas Wind into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brewbilt Manufacturing and Vestas Wind Systems, you can compare the effects of market volatilities on Brewbilt Manufacturing and Vestas Wind 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 Brewbilt Manufacturing with a short position of Vestas Wind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brewbilt Manufacturing and Vestas Wind.
Diversification Opportunities for Brewbilt Manufacturing and Vestas Wind
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Brewbilt and Vestas is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Brewbilt Manufacturing and Vestas Wind Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vestas Wind Systems and Brewbilt Manufacturing 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 Brewbilt Manufacturing are associated (or correlated) with Vestas Wind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vestas Wind Systems has no effect on the direction of Brewbilt Manufacturing i.e., Brewbilt Manufacturing and Vestas Wind go up and down completely randomly.
Pair Corralation between Brewbilt Manufacturing and Vestas Wind
Given the investment horizon of 90 days Brewbilt Manufacturing is expected to generate 27.97 times more return on investment than Vestas Wind. However, Brewbilt Manufacturing is 27.97 times more volatile than Vestas Wind Systems. It trades about 0.1 of its potential returns per unit of risk. Vestas Wind Systems is currently generating about -0.05 per unit of risk. If you would invest 0.01 in Brewbilt Manufacturing on August 26, 2024 and sell it today you would lose (0.01) from holding Brewbilt Manufacturing or give up 100.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.37% |
| Values | Daily Returns |
Brewbilt Manufacturing vs. Vestas Wind Systems
Performance |
| Timeline |
| Brewbilt Manufacturing |
| Vestas Wind Systems |
Brewbilt Manufacturing and Vestas Wind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brewbilt Manufacturing and Vestas Wind
The main advantage of trading using opposite Brewbilt Manufacturing and Vestas Wind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brewbilt Manufacturing position performs unexpectedly, Vestas Wind 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 Vestas Wind will offset losses from the drop in Vestas Wind's long position.| Brewbilt Manufacturing vs. Aumann AG | Brewbilt Manufacturing vs. Arista Power | Brewbilt Manufacturing vs. Atlas Copco AB | Brewbilt Manufacturing vs. American Commerce Solutions |
| Vestas Wind vs. KONE Oyj | Vestas Wind vs. Spirax Sarco Engineering PLC | Vestas Wind vs. Atlas Copco ADR | Vestas Wind vs. IDEX Corporation |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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