Correlation Between B Yair and Brainsway

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

Diversification Opportunities for B Yair and Brainsway

-0.12
  Correlation Coefficient

Good diversification

The 3 months correlation between BYAR and Brainsway is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding B Yair Building and Brainsway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brainsway and B Yair 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 B Yair Building 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 B Yair i.e., B Yair and Brainsway go up and down completely randomly.

Pair Corralation between B Yair and Brainsway

Assuming the 90 days trading horizon B Yair Building is expected to under-perform the Brainsway. But the stock apears to be less risky and, when comparing its historical volatility, B Yair Building is 1.17 times less risky than Brainsway. The stock trades about -0.04 of its potential returns per unit of risk. The Brainsway is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  112,600  in Brainsway on March 8, 2024 and sell it today you would earn a total of  9,400  from holding Brainsway or generate 8.35% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy97.83%
ValuesDaily Returns

B Yair Building  vs.  Brainsway

 Performance 
       Timeline  
B Yair Building 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days B Yair Building has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.
Brainsway 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Brainsway are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Brainsway sustained solid returns over the last few months and may actually be approaching a breakup point.

B Yair and Brainsway Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with B Yair and Brainsway

The main advantage of trading using opposite B Yair and Brainsway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if B Yair 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.
The idea behind B Yair Building and Brainsway 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.

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