Correlation Between Brack Capit and Inbar Group

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

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

Diversification Opportunities for Brack Capit and Inbar Group

-0.38

Correlation Coefficient

Brack Capit  Inbar Group

Very good diversification

The 3 months correlation between Brack and Inbar is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Brack Capit N and Inbar Group Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inbar Group Finance and Brack Capit 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 Brack Capit N are associated (or correlated) with Inbar Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inbar Group Finance has no effect on the direction of Brack Capit i.e., Brack Capit and Inbar Group go up and down completely randomly.

Pair Corralation between Brack Capit and Inbar Group

Assuming the 90 days trading horizon Brack Capit N is expected to under-perform the Inbar Group. But the stock apears to be less risky and, when comparing its historical volatility, Brack Capit N is 2.23 times less risky than Inbar Group. The stock trades about -0.23 of its potential returns per unit of risk. The Inbar Group Finance is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest  32,000  in Inbar Group Finance on September 28, 2024 and sell it today you would earn a total of  7,440  from holding Inbar Group Finance or generate 23.25% return on investment over 90 days.

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

Brack Capit N  vs.  Inbar Group Finance

Brack Capit N

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brack Capit N 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.

Inbar Group Finance

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Inbar Group Finance are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Inbar Group sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Brack Capit and Inbar Group

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

The idea behind Brack Capit N and Inbar Group Finance 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.

Check out your portfolio center.

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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.