Correlation Between Brenmiller Energy and Titan Machinery

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

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

Diversification Opportunities for Brenmiller Energy and Titan Machinery

-0.21

Correlation Coefficient

Brenmiller Energy  Titan Machinery

Very good diversification

The 3 months correlation between Brenmiller and Titan is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Brenmiller Energy Ltd and Titan Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Titan Machinery and Brenmiller 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 Brenmiller Energy Ltd are associated (or correlated) with Titan Machinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Titan Machinery has no effect on the direction of Brenmiller Energy i.e., Brenmiller Energy and Titan Machinery go up and down completely randomly.

Pair Corralation between Brenmiller Energy and Titan Machinery

Given the investment horizon of 90 days Brenmiller Energy Ltd is expected to under-perform the Titan Machinery. In addition to that, Brenmiller Energy is 1.4 times more volatile than Titan Machinery. It trades about -0.03 of its total potential returns per unit of risk. Titan Machinery is currently generating about 0.0 per unit of volatility. If you would invest  1,352  in Titan Machinery on September 23, 2024 and sell it today you would lose (33.00) from holding Titan Machinery or give up 2.44% of portfolio value over 90 days.

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

Brenmiller Energy Ltd  vs.  Titan Machinery

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 latest abnormal performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Titan Machinery

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Titan Machinery has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Titan Machinery is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Brenmiller Energy and Titan Machinery

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

The idea behind Brenmiller Energy Ltd and Titan Machinery 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.