Correlation Between Brimstone Investment and Exemplar REITail

Can any of the company-specific risk be diversified away by investing in both Brimstone Investment and Exemplar REITail 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 Brimstone Investment and Exemplar REITail into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Brimstone Investment and Exemplar REITail, you can compare the effects of market volatilities on Brimstone Investment and Exemplar REITail 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 Brimstone Investment with a short position of Exemplar REITail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brimstone Investment and Exemplar REITail.

Diversification Opportunities for Brimstone Investment and Exemplar REITail

-0.46

Correlation Coefficient

Brimstone Investment  Exemplar REITail

Very good diversification

The 3 months correlation between Brimstone and Exemplar is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Brimstone Investment and Exemplar REITail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exemplar REITail and Brimstone Investment 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 Brimstone Investment are associated (or correlated) with Exemplar REITail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exemplar REITail has no effect on the direction of Brimstone Investment i.e., Brimstone Investment and Exemplar REITail go up and down completely randomly.

Pair Corralation between Brimstone Investment and Exemplar REITail

Assuming the 90 days trading horizon Brimstone Investment is expected to generate 896.43 times less return on investment than Exemplar REITail. But when comparing it to its historical volatility, Brimstone Investment is 47.05 times less risky than Exemplar REITail. It trades about 0.01 of its potential returns per unit of risk. Exemplar REITail is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  107,975  in Exemplar REITail on September 5, 2024 and sell it today you would earn a total of  2,025  from holding Exemplar REITail or generate 1.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Brimstone Investment  vs.  Exemplar REITail

Brimstone Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brimstone Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Brimstone Investment is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Exemplar REITail

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Exemplar REITail are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Exemplar REITail exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Brimstone Investment and Exemplar REITail

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

The idea behind Brimstone Investment and Exemplar REITail 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.