Correlation Between IShares SPTSX and Braille Energy

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

By analyzing existing cross correlation between iShares SPTSX Capped and Braille Energy Systems, you can compare the effects of market volatilities on IShares SPTSX and Braille Energy 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 IShares SPTSX with a short position of Braille Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares SPTSX and Braille Energy.

Diversification Opportunities for IShares SPTSX and Braille Energy

-0.51

Correlation Coefficient

IShares SPTSX  Braille Energy

Excellent diversification

The 3 months correlation between IShares and Braille is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding iShares SPTSX Capped and Braille Energy Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Braille Energy Systems and IShares SPTSX 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 iShares SPTSX Capped are associated (or correlated) with Braille Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Braille Energy Systems has no effect on the direction of IShares SPTSX i.e., IShares SPTSX and Braille Energy go up and down completely randomly.

Pair Corralation between IShares SPTSX and Braille Energy

Assuming the 90 days trading horizon iShares SPTSX Capped is expected to generate 0.27 times more return on investment than Braille Energy. However, iShares SPTSX Capped is 3.73 times less risky than Braille Energy. It trades about 0.05 of its potential returns per unit of risk. Braille Energy Systems is currently generating about -0.03 per unit of risk. If you would invest  1,665  in iShares SPTSX Capped on September 15, 2024 and sell it today you would earn a total of  63.00  from holding iShares SPTSX Capped or generate 3.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

iShares SPTSX Capped  vs.  Braille Energy Systems

iShares SPTSX Capped

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in iShares SPTSX Capped are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, IShares SPTSX is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Braille Energy Systems

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Braille Energy Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with IShares SPTSX and Braille Energy

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

The idea behind iShares SPTSX Capped and Braille Energy Systems 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.