Correlation Between Brooge Energy and Sachem Capital
Can any of the company-specific risk be diversified away by investing in both Brooge Energy and Sachem Capital 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 Brooge Energy and Sachem Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brooge Energy Limited and Sachem Capital Corp, you can compare the effects of market volatilities on Brooge Energy and Sachem Capital 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 Brooge Energy with a short position of Sachem Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brooge Energy and Sachem Capital.
Diversification Opportunities for Brooge Energy and Sachem Capital
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Brooge and Sachem is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Brooge Energy Limited and Sachem Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sachem Capital Corp and Brooge 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 Brooge Energy Limited are associated (or correlated) with Sachem Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sachem Capital Corp has no effect on the direction of Brooge Energy i.e., Brooge Energy and Sachem Capital go up and down completely randomly.
Pair Corralation between Brooge Energy and Sachem Capital
Assuming the 90 days horizon Brooge Energy Limited is expected to generate 430.03 times more return on investment than Sachem Capital. However, Brooge Energy is 430.03 times more volatile than Sachem Capital Corp. It trades about 0.16 of its potential returns per unit of risk. Sachem Capital Corp is currently generating about 0.05 per unit of risk. If you would invest 0.27 in Brooge Energy Limited on September 1, 2024 and sell it today you would lose (0.04) from holding Brooge Energy Limited or give up 14.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 66.67% |
| Values | Daily Returns |
Brooge Energy Limited vs. Sachem Capital Corp
Performance |
| Timeline |
| Brooge Energy Limited |
| Sachem Capital Corp |
Brooge Energy and Sachem Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brooge Energy and Sachem Capital
The main advantage of trading using opposite Brooge Energy and Sachem Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brooge Energy position performs unexpectedly, Sachem Capital 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 Sachem Capital will offset losses from the drop in Sachem Capital's long position.The idea behind Brooge Energy Limited and Sachem Capital Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Sachem Capital vs. Sachem Capital Corp | Sachem Capital vs. Eagle Point Credit | Sachem Capital vs. B Riley Financial |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |