Correlation Between CSL and Braxia Scientific

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

By analyzing existing cross correlation between CSL Limited and Braxia Scientific Corp, you can compare the effects of market volatilities on CSL and Braxia Scientific 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 CSL with a short position of Braxia Scientific. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSL and Braxia Scientific.

Diversification Opportunities for CSL and Braxia Scientific

-0.43

Correlation Coefficient

CSL  Braxia Scientific

Very good diversification

The 3 months correlation between CSL and Braxia is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding CSL Limited and Braxia Scientific Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Braxia Scientific Corp and CSL 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 CSL Limited are associated (or correlated) with Braxia Scientific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Braxia Scientific Corp has no effect on the direction of CSL i.e., CSL and Braxia Scientific go up and down completely randomly.

Pair Corralation between CSL and Braxia Scientific

Assuming the 90 days horizon CSL Limited is expected to under-perform the Braxia Scientific. But the pink sheet apears to be less risky and, when comparing its historical volatility, CSL Limited is 7.4 times less risky than Braxia Scientific. The pink sheet trades about -0.03 of its potential returns per unit of risk. The Braxia Scientific Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  0.30  in Braxia Scientific Corp on September 15, 2024 and sell it today you would earn a total of  0.00  from holding Braxia Scientific Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

CSL Limited  vs.  Braxia Scientific Corp

CSL Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CSL Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Braxia Scientific Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Braxia Scientific Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Braxia Scientific reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CSL and Braxia Scientific

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

The idea behind CSL Limited and Braxia Scientific Corp 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.