Correlation Between Asia Pacific and Brenmiller Energy

Can any of the company-specific risk be diversified away by investing in both Asia Pacific 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 Asia Pacific and Brenmiller Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Asia Pacific Wire and Brenmiller Energy Ltd, you can compare the effects of market volatilities on Asia Pacific 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 Asia Pacific with a short position of Brenmiller Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Pacific and Brenmiller Energy.

Diversification Opportunities for Asia Pacific and Brenmiller Energy

0.3

Correlation Coefficient

Asia Pacific  Brenmiller Energy

Weak diversification

The 3 months correlation between Asia and Brenmiller is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Asia Pacific Wire and Brenmiller Energy Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brenmiller Energy and Asia Pacific 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 Asia Pacific Wire 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 Asia Pacific i.e., Asia Pacific and Brenmiller Energy go up and down completely randomly.

Pair Corralation between Asia Pacific and Brenmiller Energy

Given the investment horizon of 90 days Asia Pacific Wire is expected to generate 0.59 times more return on investment than Brenmiller Energy. However, Asia Pacific Wire is 1.68 times less risky than Brenmiller Energy. It trades about 0.0 of its potential returns per unit of risk. Brenmiller Energy Ltd is currently generating about -0.1 per unit of risk. If you would invest  153.00  in Asia Pacific Wire on January 20, 2024 and sell it today you would lose (15.00) from holding Asia Pacific Wire or give up 9.8% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Asia Pacific Wire  vs.  Brenmiller Energy Ltd

Asia Pacific Wire

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asia Pacific Wire has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Asia Pacific is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Brenmiller Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brenmiller Energy Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Asia Pacific and Brenmiller Energy

The main advantage of trading using opposite Asia Pacific and Brenmiller Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Pacific 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 Asia Pacific Wire 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.

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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..