Correlation Between Brimag L and Globrands
Can any of the company-specific risk be diversified away by investing in both Brimag L and Globrands 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 Brimag L and Globrands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brimag L and Globrands Group, you can compare the effects of market volatilities on Brimag L and Globrands 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 Brimag L with a short position of Globrands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brimag L and Globrands.
Diversification Opportunities for Brimag L and Globrands
Poor diversification
The 3 months correlation between Brimag and Globrands is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Brimag L and Globrands Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globrands Group and Brimag L 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 Brimag L are associated (or correlated) with Globrands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globrands Group has no effect on the direction of Brimag L i.e., Brimag L and Globrands go up and down completely randomly.
Pair Corralation between Brimag L and Globrands
Assuming the 90 days trading horizon Brimag L is expected to generate 1.33 times more return on investment than Globrands. However, Brimag L is 1.33 times more volatile than Globrands Group. It trades about 0.21 of its potential returns per unit of risk. Globrands Group is currently generating about 0.25 per unit of risk. If you would invest 112,000 in Brimag L on September 3, 2024 and sell it today you would earn a total of 17,500 from holding Brimag L or generate 15.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brimag L vs. Globrands Group
Performance |
| Timeline |
| Brimag L |
| Globrands Group |
Brimag L and Globrands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brimag L and Globrands
The main advantage of trading using opposite Brimag L and Globrands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brimag L position performs unexpectedly, Globrands 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 Globrands will offset losses from the drop in Globrands' long position.| Brimag L vs. Ralco Agencies | Brimag L vs. Neto ME Holdings | Brimag L vs. Globrands Group | Brimag L vs. Nextcom |
| Globrands vs. Neto ME Holdings | Globrands vs. Delek Automotive Systems | Globrands vs. Kerur Holdings | Globrands vs. Ram On Investments and |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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