Correlation Between Brait SE and Aveng

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

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

Diversification Opportunities for Brait SE and Aveng

0.65

Correlation Coefficient

Brait SE  Aveng

Poor diversification

The 3 months correlation between Brait and Aveng is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Brait SE and Aveng in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aveng and Brait SE 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 Brait SE are associated (or correlated) with Aveng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aveng has no effect on the direction of Brait SE i.e., Brait SE and Aveng go up and down completely randomly.

Pair Corralation between Brait SE and Aveng

Assuming the 90 days trading horizon Brait SE is expected to generate 0.32 times more return on investment than Aveng. However, Brait SE is 3.13 times less risky than Aveng. It trades about 0.02 of its potential returns per unit of risk. Aveng is currently generating about -0.26 per unit of risk. 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	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Brait SE  vs.  Aveng

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.

Aveng

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aveng has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Brait SE and Aveng

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

The idea behind Brait SE and Aveng 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.