Correlation Between Augwind Energy and Brainsway

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

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

Diversification Opportunities for Augwind Energy and Brainsway

-0.44

Correlation Coefficient

Augwind Energy  Brainsway

Very good diversification

The 3 months correlation between Augwind and Brainsway is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Augwind Energy Tech and Brainsway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brainsway and Augwind Energy 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 Augwind Energy Tech 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 Augwind Energy i.e., Augwind Energy and Brainsway go up and down completely randomly.

Pair Corralation between Augwind Energy and Brainsway

Assuming the 90 days trading horizon Augwind Energy Tech is expected to under-perform the Brainsway. In addition to that, Augwind Energy is 1.33 times more volatile than Brainsway. It trades about -0.24 of its total potential returns per unit of risk. Brainsway is currently generating about -0.04 per unit of volatility. If you would invest  189,900  in Brainsway on November 30, 2024 and sell it today you would lose (13,200) from holding Brainsway or give up 6.95% of portfolio value over 90 days.

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

Augwind Energy Tech  vs.  Brainsway

Augwind Energy Tech

Risk-Adjusted Performance

Very Weak

Over the last 90 days Augwind Energy Tech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Brainsway

Risk-Adjusted Performance

Very Weak

Over the last 90 days Brainsway has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Augwind Energy and Brainsway

The main advantage of trading using opposite Augwind Energy and Brainsway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Augwind Energy 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 Augwind Energy Tech 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.

Check out your portfolio center.

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.