Correlation Between Amanet Management and Brimag L

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

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

Diversification Opportunities for Amanet Management and Brimag L

0.52

Correlation Coefficient

Amanet Management  Brimag L

Very weak diversification

The 3 months correlation between Amanet and Brimag is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Amanet Management Systems and Brimag L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brimag L and Amanet Management 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 Amanet Management Systems are associated (or correlated) with Brimag L. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brimag L has no effect on the direction of Amanet Management i.e., Amanet Management and Brimag L go up and down completely randomly.

Pair Corralation between Amanet Management and Brimag L

Assuming the 90 days trading horizon Amanet Management is expected to generate 3.32 times less return on investment than Brimag L. But when comparing it to its historical volatility, Amanet Management Systems is 1.02 times less risky than Brimag L. It trades about 0.06 of its potential returns per unit of risk. Brimag L is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  112,000  in Brimag L on September 3, 2024 and sell it today you would earn a total of  17,500  from holding Brimag L or generate 15.63% return on investment over 90 days.

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

Amanet Management Systems  vs.  Brimag L

Amanet Management Systems

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Amanet Management Systems are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Amanet Management is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Brimag L

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Brimag L are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Brimag L sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Amanet Management and Brimag L

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

The idea behind Amanet Management Systems and Brimag L 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.