Correlation Between Enlight Renewable and Brainsway
Can any of the company-specific risk be diversified away by investing in both Enlight Renewable 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 Enlight Renewable and Brainsway into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enlight Renewable Energy and Brainsway, you can compare the effects of market volatilities on Enlight Renewable 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 Enlight Renewable with a short position of Brainsway. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enlight Renewable and Brainsway.
Diversification Opportunities for Enlight Renewable and Brainsway
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Enlight and Brainsway is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Enlight Renewable Energy and Brainsway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brainsway and Enlight Renewable 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 Enlight Renewable Energy 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 Enlight Renewable i.e., Enlight Renewable and Brainsway go up and down completely randomly.
Pair Corralation between Enlight Renewable and Brainsway
Assuming the 90 days trading horizon Enlight Renewable Energy is expected to generate 0.69 times more return on investment than Brainsway. However, Enlight Renewable Energy is 1.46 times less risky than Brainsway. It trades about 0.09 of its potential returns per unit of risk. Brainsway is currently generating about -0.04 per unit of risk. If you would invest 588,100 in Enlight Renewable Energy on August 29, 2024 and sell it today you would earn a total of 18,400 from holding Enlight Renewable Energy or generate 3.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enlight Renewable Energy vs. Brainsway
Performance |
| Timeline |
| Enlight Renewable Energy |
| Brainsway |
Enlight Renewable and Brainsway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enlight Renewable and Brainsway
The main advantage of trading using opposite Enlight Renewable and Brainsway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enlight Renewable 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.| Enlight Renewable vs. Energix Renewable Energies | Enlight Renewable vs. Doral Group Renewable | Enlight Renewable vs. Elbit Systems | Enlight Renewable vs. Electreon Wireless |
| 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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