Correlation Between Braille Energy and Clear Blue

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

By analyzing existing cross correlation between Braille Energy Systems and Clear Blue Technologies, you can compare the effects of market volatilities on Braille Energy and Clear Blue 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 Braille Energy with a short position of Clear Blue. Check out your portfolio center. Please also check ongoing floating volatility patterns of Braille Energy and Clear Blue.

Diversification Opportunities for Braille Energy and Clear Blue

0.45

Correlation Coefficient

Braille Energy  Clear Blue

Very weak diversification

The 3 months correlation between Braille and Clear is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Braille Energy Systems and Clear Blue Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clear Blue Technologies and Braille 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 Braille Energy Systems are associated (or correlated) with Clear Blue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clear Blue Technologies has no effect on the direction of Braille Energy i.e., Braille Energy and Clear Blue go up and down completely randomly.

Pair Corralation between Braille Energy and Clear Blue

Assuming the 90 days horizon Braille Energy Systems is expected to under-perform the Clear Blue. But the stock apears to be less risky and, when comparing its historical volatility, Braille Energy Systems is 2.76 times less risky than Clear Blue. The stock trades about -0.07 of its potential returns per unit of risk. The Clear Blue Technologies is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  5.50  in Clear Blue Technologies on September 21, 2024 and sell it today you would lose (3.50) from holding Clear Blue Technologies or give up 63.64% of portfolio value over 90 days.

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

Braille Energy Systems  vs.  Clear Blue Technologies

Braille Energy Systems

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Braille Energy Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Clear Blue Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Clear Blue Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's essential indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Braille Energy and Clear Blue

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

The idea behind Braille Energy Systems and Clear Blue Technologies 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.