Correlation Between BriQ Properties and Athens Water

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

By analyzing existing cross correlation between BriQ Properties Real and Athens Water Supply, you can compare the effects of market volatilities on BriQ Properties and Athens Water 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 BriQ Properties with a short position of Athens Water. Check out your portfolio center. Please also check ongoing floating volatility patterns of BriQ Properties and Athens Water.

Diversification Opportunities for BriQ Properties and Athens Water

0.6

Correlation Coefficient

BriQ Properties  Athens Water

Poor diversification

The 3 months correlation between BriQ and Athens is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding BriQ Properties Real and Athens Water Supply in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Athens Water Supply and BriQ Properties 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 BriQ Properties Real are associated (or correlated) with Athens Water. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Athens Water Supply has no effect on the direction of BriQ Properties i.e., BriQ Properties and Athens Water go up and down completely randomly.

Pair Corralation between BriQ Properties and Athens Water

Assuming the 90 days trading horizon BriQ Properties Real is expected to generate 0.93 times more return on investment than Athens Water. However, BriQ Properties Real is 1.08 times less risky than Athens Water. It trades about 0.14 of its potential returns per unit of risk. Athens Water Supply is currently generating about 0.08 per unit of risk. If you would invest  197.00  in BriQ Properties Real on September 15, 2024 and sell it today you would earn a total of  14.00  from holding BriQ Properties Real or generate 7.11% return on investment over 90 days.

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

BriQ Properties Real  vs.  Athens Water Supply

BriQ Properties Real

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BriQ Properties Real are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, BriQ Properties may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Athens Water Supply

Risk-Adjusted Performance

6 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Athens Water Supply are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Athens Water is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with BriQ Properties and Athens Water

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

The idea behind BriQ Properties Real and Athens Water Supply 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.