Correlation Between Brainsway and Prime Energy
Can any of the company-specific risk be diversified away by investing in both Brainsway and Prime Energy 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 Brainsway and Prime Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brainsway and Prime Energy PE, you can compare the effects of market volatilities on Brainsway and Prime Energy 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 Brainsway with a short position of Prime Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brainsway and Prime Energy.
Diversification Opportunities for Brainsway and Prime Energy
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Brainsway and Prime is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Brainsway and Prime Energy PE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prime Energy PE and Brainsway 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 Brainsway are associated (or correlated) with Prime Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prime Energy PE has no effect on the direction of Brainsway i.e., Brainsway and Prime Energy go up and down completely randomly.
Pair Corralation between Brainsway and Prime Energy
Assuming the 90 days trading horizon Brainsway is expected to under-perform the Prime Energy. But the stock apears to be less risky and, when comparing its historical volatility, Brainsway is 1.6 times less risky than Prime Energy. The stock trades about -0.04 of its potential returns per unit of risk. The Prime Energy PE is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 60,500 in Prime Energy PE on August 25, 2024 and sell it today you would earn a total of 6,560 from holding Prime Energy PE or generate 10.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brainsway vs. Prime Energy PE
Performance |
| Timeline |
| Brainsway |
| Prime Energy PE |
Brainsway and Prime Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brainsway and Prime Energy
The main advantage of trading using opposite Brainsway and Prime Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brainsway position performs unexpectedly, Prime Energy 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 Prime Energy will offset losses from the drop in Prime Energy's long position.| Brainsway vs. Netz Hotels | Brainsway vs. Migdal Insurance | Brainsway vs. Harel Insurance Investments | Brainsway vs. Menora Miv Hld |
| Prime Energy vs. Enlight Renewable Energy | Prime Energy vs. Energix Renewable Energies | Prime Energy vs. Brainsway | Prime Energy vs. Mivne Real Estate |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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