Correlation Between NanoVibronix and BrainsWay

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

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

Diversification Opportunities for NanoVibronix and BrainsWay

0.14

Correlation Coefficient

NanoVibronix  BrainsWay

Average diversification

The 3 months correlation between NanoVibronix and BrainsWay is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding NanoVibronix and BrainsWay in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BrainsWay and NanoVibronix 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 NanoVibronix are associated (or correlated) with BrainsWay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BrainsWay has no effect on the direction of NanoVibronix i.e., NanoVibronix and BrainsWay go up and down completely randomly.

Pair Corralation between NanoVibronix and BrainsWay

Given the investment horizon of 90 days NanoVibronix is expected to under-perform the BrainsWay. But the stock apears to be less risky and, when comparing its historical volatility, NanoVibronix is 3.93 times less risky than BrainsWay. The stock trades about -0.01 of its potential returns per unit of risk. The BrainsWay is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  315.00  in BrainsWay on September 21, 2024 and sell it today you would earn a total of  538.00  from holding BrainsWay or generate 170.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

NanoVibronix  vs.  BrainsWay

NanoVibronix

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NanoVibronix has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, NanoVibronix is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

BrainsWay

Risk-Adjusted Performance

9 of 100

OK

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

Pair Trading with NanoVibronix and BrainsWay

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

The idea behind NanoVibronix and BrainsWay 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.