Correlation Between Creative Media and Brainsway
Can any of the company-specific risk be diversified away by investing in both Creative Media and Brainsway 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 Creative Media and Brainsway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Creative Media Community and Brainsway, you can compare the effects of market volatilities on Creative Media and Brainsway 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 Creative Media with a short position of Brainsway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Creative Media and Brainsway.
Diversification Opportunities for Creative Media and Brainsway
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Creative and Brainsway is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Creative Media Community and Brainsway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brainsway and Creative Media 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 Creative Media Community are associated (or correlated) with Brainsway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brainsway has no effect on the direction of Creative Media i.e., Creative Media and Brainsway go up and down completely randomly.
Pair Corralation between Creative Media and Brainsway
Assuming the 90 days trading horizon Creative Media Community is expected to under-perform the Brainsway. In addition to that, Creative Media is 3.99 times more volatile than Brainsway. It trades about -0.34 of its total potential returns per unit of risk. Brainsway is currently generating about 0.19 per unit of volatility. If you would invest 143,000 in Brainsway on August 29, 2024 and sell it today you would earn a total of 36,900 from holding Brainsway or generate 25.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Creative Media Community vs. Brainsway
Performance |
| Timeline |
| Creative Media Community |
| Brainsway |
Creative Media and Brainsway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Creative Media and Brainsway
The main advantage of trading using opposite Creative Media and Brainsway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Creative Media position performs unexpectedly, Brainsway 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 Brainsway will offset losses from the drop in Brainsway's long position.| Creative Media vs. Nice | Creative Media vs. The Gold Bond | Creative Media vs. Bank Leumi Le Israel | Creative Media vs. ICL Israel Chemicals |
| Brainsway vs. Ilex Medical | Brainsway vs. First International Bank | Brainsway vs. Elbit Medical Technologies | Brainsway vs. RSL Electronics |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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