Correlation Between Atlantica Sustainable and Brenmiller Energy

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

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

Diversification Opportunities for Atlantica Sustainable and Brenmiller Energy

-0.56

Correlation Coefficient

Atlantica Sustainable  Brenmiller Energy

Excellent diversification

The 3 months correlation between Atlantica and Brenmiller is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Atlantica Sustainable Infrastr and Brenmiller Energy Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brenmiller Energy and Atlantica Sustainable 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 Atlantica Sustainable Infrastructure are associated (or correlated) with Brenmiller Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brenmiller Energy has no effect on the direction of Atlantica Sustainable i.e., Atlantica Sustainable and Brenmiller Energy go up and down completely randomly.

Pair Corralation between Atlantica Sustainable and Brenmiller Energy

Allowing for the 90-day total investment horizon Atlantica Sustainable Infrastructure is expected to generate 0.02 times more return on investment than Brenmiller Energy. However, Atlantica Sustainable Infrastructure is 59.06 times less risky than Brenmiller Energy. It trades about 0.2 of its potential returns per unit of risk. Brenmiller Energy Ltd is currently generating about -0.08 per unit of risk. If you would invest  2,184  in Atlantica Sustainable Infrastructure on August 31, 2024 and sell it today you would earn a total of  32.00  from holding Atlantica Sustainable Infrastructure or generate 1.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Atlantica Sustainable Infrastr  vs.  Brenmiller Energy Ltd

Atlantica Sustainable

Risk-Adjusted Performance

15 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Atlantica Sustainable Infrastructure are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Atlantica Sustainable is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Brenmiller Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brenmiller Energy Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Atlantica Sustainable and Brenmiller Energy

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

The idea behind Atlantica Sustainable Infrastructure and Brenmiller Energy Ltd 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.