Correlation Between CBAK Energy and Brenmiller Energy

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

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

Diversification Opportunities for CBAK Energy and Brenmiller Energy

0.23

Correlation Coefficient

CBAK Energy  Brenmiller Energy

Modest diversification

The 3 months correlation between CBAK and Brenmiller is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding CBAK Energy Technology and Brenmiller Energy Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brenmiller Energy and CBAK Energy 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 CBAK Energy Technology 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 CBAK Energy i.e., CBAK Energy and Brenmiller Energy go up and down completely randomly.

Pair Corralation between CBAK Energy and Brenmiller Energy

Given the investment horizon of 90 days CBAK Energy Technology is expected to generate 0.57 times more return on investment than Brenmiller Energy. However, CBAK Energy Technology is 1.77 times less risky than Brenmiller Energy. It trades about 0.01 of its potential returns per unit of risk. Brenmiller Energy Ltd is currently generating about -0.06 per unit of risk. If you would invest  111.00  in CBAK Energy Technology on January 19, 2024 and sell it today you would lose (15.50) from holding CBAK Energy Technology or give up 13.96% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.36%
Values	Daily Returns

CBAK Energy Technology  vs.  Brenmiller Energy Ltd

CBAK Energy Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CBAK Energy Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, CBAK Energy is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

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 abnormal 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 CBAK Energy and Brenmiller Energy

The main advantage of trading using opposite CBAK Energy and Brenmiller Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CBAK Energy 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 CBAK Energy Technology 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.