Correlation Between BGrimm Power and Super Energy

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

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

Diversification Opportunities for BGrimm Power and Super Energy

0.3

Correlation Coefficient

BGrimm Power  Super Energy

Weak diversification

The 3 months correlation between BGrimm and Super is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding BGrimm Power Public and Super Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Super Energy and BGrimm Power 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 BGrimm Power Public are associated (or correlated) with Super Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Super Energy has no effect on the direction of BGrimm Power i.e., BGrimm Power and Super Energy go up and down completely randomly.

Pair Corralation between BGrimm Power and Super Energy

Assuming the 90 days trading horizon BGrimm Power Public is expected to under-perform the Super Energy. But the stock apears to be less risky and, when comparing its historical volatility, BGrimm Power Public is 1.71 times less risky than Super Energy. The stock trades about -0.01 of its potential returns per unit of risk. The Super Energy is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  25.00  in Super Energy on September 4, 2024 and sell it today you would earn a total of  2.00  from holding Super Energy or generate 8.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

BGrimm Power Public  vs.  Super Energy

BGrimm Power Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BGrimm Power Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, BGrimm Power is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Super Energy

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Super Energy are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental drivers, Super Energy may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with BGrimm Power and Super Energy

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

The idea behind BGrimm Power Public and Super Energy 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.