Correlation Between Braze and Model N

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

By analyzing existing cross correlation between Braze Inc and Model N, you can compare the effects of market volatilities on Braze and Model N 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 Braze with a short position of Model N. Check out your portfolio center. Please also check ongoing floating volatility patterns of Braze and Model N.

Diversification Opportunities for Braze and Model N

-0.91

Correlation Coefficient

Braze  Model N

Pay attention - limited upside

The 3 months correlation between Braze and Model is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Braze Inc and Model N in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Model N and Braze 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 Braze Inc are associated (or correlated) with Model N. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Model N has no effect on the direction of Braze i.e., Braze and Model N go up and down completely randomly.

Pair Corralation between Braze and Model N

Given the investment horizon of 90 days Braze Inc is expected to under-perform the Model N. In addition to that, Braze is 25.89 times more volatile than Model N. It trades about -0.23 of its total potential returns per unit of risk. Model N is currently generating about 0.35 per unit of volatility. If you would invest  2,969  in Model N on March 5, 2024 and sell it today you would earn a total of  20.00  from holding Model N or generate 0.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Braze Inc  vs.  Model N

Braze Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Braze Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in July 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Model N

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Model N are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Model N displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Braze and Model N

The main advantage of trading using opposite Braze and Model N positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Braze position performs unexpectedly, Model N 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 Model N will offset losses from the drop in Model N's long position.

The idea behind Braze Inc and Model N 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.