Correlation Between Braze and Model N

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

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

Diversification Opportunities for Braze and Model N

0.1

Correlation Coefficient

Braze  Model N

Average diversification

The 3 months correlation between Braze and Model is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Braze Inc and Model N in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Model N 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 Model N. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Model N has no effect on the direction of Braze i.e., Braze and Model N go up and down completely randomly.

Pair Corralation between Braze and Model N

If you would invest  3,510  in Braze Inc on September 15, 2024 and sell it today you would earn a total of  653.00  from holding Braze Inc or generate 18.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Braze Inc  vs.  Model N

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 unfluctuating basic indicators, Braze exhibited solid returns over the last few months and may actually be approaching a breakup point.

Model N

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Braze and Model N

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

The idea behind Braze Inc and Model N 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.