Correlation Between AECI and Brait SE

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

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

Diversification Opportunities for AECI and Brait SE

0.0

Correlation Coefficient

AECI  Brait SE

Pay attention - limited upside

The 3 months correlation between AECI and Brait is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AECI and Brait SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brait SE and AECI 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 AECI are associated (or correlated) with Brait SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brait SE has no effect on the direction of AECI i.e., AECI and Brait SE go up and down completely randomly.

Pair Corralation between AECI and Brait SE

If you would invest  20,000  in Brait SE on December 27, 2024 and sell it today you would earn a total of  200.00  from holding Brait SE or generate 1.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.61%
Values	Daily Returns

AECI  vs.  Brait SE

AECI

Risk-Adjusted Performance

OK

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

Brait SE

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Brait SE are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Brait SE is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with AECI and Brait SE

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

The idea behind AECI and Brait SE 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.