Correlation Between Brenmiller Energy and American Security

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

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

Diversification Opportunities for Brenmiller Energy and American Security

-0.3

Correlation Coefficient

Brenmiller Energy  American Security

Very good diversification

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

Pair Corralation between Brenmiller Energy and American Security

Given the investment horizon of 90 days Brenmiller Energy is expected to generate 2.37 times less return on investment than American Security. But when comparing it to its historical volatility, Brenmiller Energy Ltd is 2.23 times less risky than American Security. It trades about 0.09 of its potential returns per unit of risk. American Security Resources is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  0.01  in American Security Resources on December 30, 2024 and sell it today you would earn a total of  0.00  from holding American Security Resources or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Brenmiller Energy Ltd  vs.  American Security Resources

Brenmiller Energy

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Brenmiller Energy Ltd are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Brenmiller Energy reported solid returns over the last few months and may actually be approaching a breakup point.

American Security

Risk-Adjusted Performance

OK

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

Pair Trading with Brenmiller Energy and American Security

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

The idea behind Brenmiller Energy Ltd and American Security Resources 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.