Correlation Between 0x and BRC

Can any of the company-specific risk be diversified away by investing in both 0x and BRC 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 0x and BRC into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 0x and BRC, you can compare the effects of market volatilities on 0x and BRC 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 0x with a short position of BRC. Check out your portfolio center. Please also check ongoing floating volatility patterns of 0x and BRC.

Diversification Opportunities for 0x and BRC

0.16

Correlation Coefficient

0x  BRC

Average diversification

The 3 months correlation between 0x and BRC is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding 0x and BRC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRC and 0x 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 0x are associated (or correlated) with BRC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRC has no effect on the direction of 0x i.e., 0x and BRC go up and down completely randomly.

Pair Corralation between 0x and BRC

If you would invest  28.00  in 0x on September 3, 2024 and sell it today you would earn a total of  34.00  from holding 0x or generate 121.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.54%
Values	Daily Returns

0x  vs.  BRC

0x

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in 0x are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, 0x exhibited solid returns over the last few months and may actually be approaching a breakup point.

BRC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BRC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, BRC is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with 0x and BRC

The main advantage of trading using opposite 0x and BRC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 0x position performs unexpectedly, BRC 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 BRC will offset losses from the drop in BRC's long position.

The idea behind 0x and BRC 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.