Correlation Between Braille Energy and Kinaxis

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

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

Diversification Opportunities for Braille Energy and Kinaxis

-0.44

Correlation Coefficient

Braille Energy  Kinaxis

Very good diversification

The 3 months correlation between Braille and Kinaxis is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Braille Energy Systems and Kinaxis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinaxis and Braille 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 Braille Energy Systems are associated (or correlated) with Kinaxis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinaxis has no effect on the direction of Braille Energy i.e., Braille Energy and Kinaxis go up and down completely randomly.

Pair Corralation between Braille Energy and Kinaxis

Assuming the 90 days horizon Braille Energy is expected to generate 12.67 times less return on investment than Kinaxis. In addition to that, Braille Energy is 2.76 times more volatile than Kinaxis. It trades about 0.01 of its total potential returns per unit of risk. Kinaxis is currently generating about 0.18 per unit of volatility. If you would invest  14,796  in Kinaxis on September 4, 2024 and sell it today you would earn a total of  3,470  from holding Kinaxis or generate 23.45% return on investment over 90 days.

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

Braille Energy Systems  vs.  Kinaxis

Braille Energy Systems

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Braille Energy Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Braille Energy is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Kinaxis

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kinaxis are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Kinaxis displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Braille Energy and Kinaxis

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

The idea behind Braille Energy Systems and Kinaxis 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.