Correlation Between Brainstorm Cell and Brill Shoe

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Can any of the company-specific risk be diversified away by investing in both Brainstorm Cell and Brill Shoe 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 Brainstorm Cell and Brill Shoe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brainstorm Cell Therapeutics and Brill Shoe Industries, you can compare the effects of market volatilities on Brainstorm Cell and Brill Shoe 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 Brainstorm Cell with a short position of Brill Shoe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brainstorm Cell and Brill Shoe.

Diversification Opportunities for Brainstorm Cell and Brill Shoe

0.26
  Correlation Coefficient

Modest diversification

The 3 months correlation between Brainstorm and Brill is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Brainstorm Cell Therapeutics and Brill Shoe Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brill Shoe Industries and Brainstorm Cell 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 Brainstorm Cell Therapeutics are associated (or correlated) with Brill Shoe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brill Shoe Industries has no effect on the direction of Brainstorm Cell i.e., Brainstorm Cell and Brill Shoe go up and down completely randomly.

Pair Corralation between Brainstorm Cell and Brill Shoe

Given the investment horizon of 90 days Brainstorm Cell Therapeutics is expected to generate 4.61 times more return on investment than Brill Shoe. However, Brainstorm Cell is 4.61 times more volatile than Brill Shoe Industries. It trades about 0.22 of its potential returns per unit of risk. Brill Shoe Industries is currently generating about 0.08 per unit of risk. If you would invest  36.00  in Brainstorm Cell Therapeutics on December 29, 2023 and sell it today you would earn a total of  20.00  from holding Brainstorm Cell Therapeutics or generate 55.56% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy78.26%
ValuesDaily Returns

Brainstorm Cell Therapeutics  vs.  Brill Shoe Industries

 Performance 
       Timeline  
Brainstorm Cell Ther 

Risk-Adjusted Performance

13 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Brainstorm Cell Therapeutics are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating essential indicators, Brainstorm Cell demonstrated solid returns over the last few months and may actually be approaching a breakup point.
Brill Shoe Industries 

Risk-Adjusted Performance

8 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Brill Shoe Industries are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Brill Shoe sustained solid returns over the last few months and may actually be approaching a breakup point.

Brainstorm Cell and Brill Shoe Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Brainstorm Cell and Brill Shoe

The main advantage of trading using opposite Brainstorm Cell and Brill Shoe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brainstorm Cell position performs unexpectedly, Brill Shoe 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 Brill Shoe will offset losses from the drop in Brill Shoe's long position.
The idea behind Brainstorm Cell Therapeutics and Brill Shoe Industries 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.
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.

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