Correlation Between PACCAR and Brenmiller Energy
Can any of the company-specific risk be diversified away by investing in both PACCAR and Brenmiller 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 PACCAR and Brenmiller Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PACCAR Inc and Brenmiller Energy Ltd, you can compare the effects of market volatilities on PACCAR and Brenmiller 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 PACCAR with a short position of Brenmiller Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of PACCAR and Brenmiller Energy.
Diversification Opportunities for PACCAR and Brenmiller Energy
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PACCAR and Brenmiller is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding PACCAR Inc and Brenmiller Energy Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brenmiller Energy and PACCAR 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 PACCAR Inc are associated (or correlated) with Brenmiller Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brenmiller Energy has no effect on the direction of PACCAR i.e., PACCAR and Brenmiller Energy go up and down completely randomly.
Pair Corralation between PACCAR and Brenmiller Energy
Given the investment horizon of 90 days PACCAR Inc is expected to under-perform the Brenmiller Energy. But the stock apears to be less risky and, when comparing its historical volatility, PACCAR Inc is 3.05 times less risky than Brenmiller Energy. The stock trades about -0.11 of its potential returns per unit of risk. The Brenmiller Energy Ltd is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 74.00 in Brenmiller Energy Ltd on September 14, 2024 and sell it today you would earn a total of 0.00 from holding Brenmiller Energy Ltd or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PACCAR Inc vs. Brenmiller Energy Ltd
Performance |
| Timeline |
| PACCAR Inc |
| Brenmiller Energy |
PACCAR and Brenmiller Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PACCAR and Brenmiller Energy
The main advantage of trading using opposite PACCAR and Brenmiller Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PACCAR position performs unexpectedly, Brenmiller 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 Brenmiller Energy will offset losses from the drop in Brenmiller Energy's long position.The idea behind PACCAR Inc and Brenmiller Energy Ltd 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.| Brenmiller Energy vs. Fusion Fuel Green | Brenmiller Energy vs. Fluence Energy | Brenmiller Energy vs. Altus Power | Brenmiller Energy vs. Energy Vault Holdings |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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