Correlation Between Brainsway and Payment Financial
Can any of the company-specific risk be diversified away by investing in both Brainsway and Payment Financial 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 Brainsway and Payment Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brainsway and Payment Financial Technologies, you can compare the effects of market volatilities on Brainsway and Payment Financial 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 Brainsway with a short position of Payment Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brainsway and Payment Financial.
Diversification Opportunities for Brainsway and Payment Financial
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Brainsway and Payment is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Brainsway and Payment Financial Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payment Financial and Brainsway 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 Brainsway are associated (or correlated) with Payment Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payment Financial has no effect on the direction of Brainsway i.e., Brainsway and Payment Financial go up and down completely randomly.
Pair Corralation between Brainsway and Payment Financial
Assuming the 90 days trading horizon Brainsway is expected to generate 0.86 times more return on investment than Payment Financial. However, Brainsway is 1.17 times less risky than Payment Financial. It trades about -0.05 of its potential returns per unit of risk. Payment Financial Technologies is currently generating about -0.09 per unit of risk. If you would invest 179,500 in Brainsway on September 28, 2024 and sell it today you would lose (4,900) from holding Brainsway or give up 2.73% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Brainsway vs. Payment Financial Technologies
Performance |
Timeline |
Brainsway |
Payment Financial |
Brainsway and Payment Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Brainsway and Payment Financial
The main advantage of trading using opposite Brainsway and Payment Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brainsway position performs unexpectedly, Payment Financial 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 Payment Financial will offset losses from the drop in Payment Financial's long position.Brainsway vs. Feat Fund Investments | Brainsway vs. Imed Infinity Medical Limited | Brainsway vs. Elbit Medical Technologies | Brainsway vs. Abra Information Technologies |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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