Correlation Between Strauss and Brimag L

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

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

Diversification Opportunities for Strauss and Brimag L

-0.28

Correlation Coefficient

Strauss  Brimag L

Very good diversification

The 3 months correlation between Strauss and Brimag is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Strauss Group and Brimag L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brimag L and Strauss 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 Strauss Group are associated (or correlated) with Brimag L. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brimag L has no effect on the direction of Strauss i.e., Strauss and Brimag L go up and down completely randomly.

Pair Corralation between Strauss and Brimag L

Assuming the 90 days trading horizon Strauss Group is expected to under-perform the Brimag L. But the stock apears to be less risky and, when comparing its historical volatility, Strauss Group is 1.7 times less risky than Brimag L. The stock trades about -0.13 of its potential returns per unit of risk. The Brimag L is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  144,500  in Brimag L on March 5, 2024 and sell it today you would lose (800.00) from holding Brimag L or give up 0.55% of portfolio value over 90 days.

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

Strauss Group  vs.  Brimag L

Strauss Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Strauss Group 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 somewhat strong which may send shares a bit higher in July 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Brimag L

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brimag L has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Brimag L is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Strauss and Brimag L

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

The idea behind Strauss Group and Brimag L 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 CEOs Directory module to screen CEOs from public companies around the world.