Correlation Between Braille Energy and Extendicare
Can any of the company-specific risk be diversified away by investing in both Braille Energy and Extendicare 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 Braille Energy and Extendicare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Braille Energy Systems and Extendicare, you can compare the effects of market volatilities on Braille Energy and Extendicare 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 Braille Energy with a short position of Extendicare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Braille Energy and Extendicare.
Diversification Opportunities for Braille Energy and Extendicare
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Braille and Extendicare is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Braille Energy Systems and Extendicare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Extendicare and Braille Energy 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 Braille Energy Systems are associated (or correlated) with Extendicare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Extendicare has no effect on the direction of Braille Energy i.e., Braille Energy and Extendicare go up and down completely randomly.
Pair Corralation between Braille Energy and Extendicare
Assuming the 90 days horizon Braille Energy Systems is expected to under-perform the Extendicare. In addition to that, Braille Energy is 2.61 times more volatile than Extendicare. It trades about -0.05 of its total potential returns per unit of risk. Extendicare is currently generating about 0.24 per unit of volatility. If you would invest 1,044 in Extendicare on November 27, 2024 and sell it today you would earn a total of 110.00 from holding Extendicare or generate 10.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Braille Energy Systems vs. Extendicare
Performance |
| Timeline |
| Braille Energy Systems |
| Extendicare |
Braille Energy and Extendicare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Braille Energy and Extendicare
The main advantage of trading using opposite Braille Energy and Extendicare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Braille Energy position performs unexpectedly, Extendicare 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 Extendicare will offset losses from the drop in Extendicare's long position.| Braille Energy vs. Solar Alliance Energy | Braille Energy vs. Lite Access Technologies | Braille Energy vs. CryptoStar Corp | Braille Energy vs. Gratomic |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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