Correlation Between BrainChip Holdings and Powersafe Technology

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

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

Diversification Opportunities for BrainChip Holdings and Powersafe Technology

0.0

Correlation Coefficient

BrainChip Holdings  Powersafe Technology

Pay attention - limited upside

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

Pair Corralation between BrainChip Holdings and Powersafe Technology

If you would invest  1,796  in BrainChip Holdings on September 20, 2024 and sell it today you would lose (1,131) from holding BrainChip Holdings or give up 62.97% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	5.44%
Values	Daily Returns

BrainChip Holdings  vs.  Powersafe Technology Corp

BrainChip Holdings

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BrainChip Holdings are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, BrainChip Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

Powersafe Technology Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Powersafe Technology Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Powersafe Technology is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with BrainChip Holdings and Powersafe Technology

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

The idea behind BrainChip Holdings and Powersafe Technology Corp 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.