Correlation Between Braze and Embark Technology

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

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

Diversification Opportunities for Braze and Embark Technology

-0.09

Correlation Coefficient

Braze  Embark Technology

Good diversification

The 3 months correlation between Braze and Embark is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Braze Inc and Embark Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Embark Technology and Braze 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 Braze Inc are associated (or correlated) with Embark Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Embark Technology has no effect on the direction of Braze i.e., Braze and Embark Technology go up and down completely randomly.

Pair Corralation between Braze and Embark Technology

If you would invest  3,573  in Braze Inc on September 12, 2024 and sell it today you would earn a total of  522.00  from holding Braze Inc or generate 14.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.55%
Values	Daily Returns

Braze Inc  vs.  Embark Technology

Braze Inc

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Braze Inc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting basic indicators, Braze exhibited solid returns over the last few months and may actually be approaching a breakup point.

Embark Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Embark Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental drivers, Embark Technology is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Braze and Embark Technology

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

The idea behind Braze Inc and Embark Technology 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.