Correlation Between Brenmiller Energy and Mass Megawat

Can any of the company-specific risk be diversified away by investing in both Brenmiller Energy and Mass Megawat 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 Mass Megawat 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 Mass Megawat Wind, you can compare the effects of market volatilities on Brenmiller Energy and Mass Megawat 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 Mass Megawat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brenmiller Energy and Mass Megawat.

Diversification Opportunities for Brenmiller Energy and Mass Megawat

-0.02

Correlation Coefficient

Brenmiller Energy  Mass Megawat

Good diversification

The 3 months correlation between Brenmiller and Mass is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Brenmiller Energy Ltd and Mass Megawat Wind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mass Megawat Wind 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 Mass Megawat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mass Megawat Wind has no effect on the direction of Brenmiller Energy i.e., Brenmiller Energy and Mass Megawat go up and down completely randomly.

Pair Corralation between Brenmiller Energy and Mass Megawat

Given the investment horizon of 90 days Brenmiller Energy Ltd is expected to under-perform the Mass Megawat. But the stock apears to be less risky and, when comparing its historical volatility, Brenmiller Energy Ltd is 6.07 times less risky than Mass Megawat. The stock trades about -0.01 of its potential returns per unit of risk. The Mass Megawat Wind is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  81.00  in Mass Megawat Wind on October 2, 2024 and sell it today you would lose (50.00) from holding Mass Megawat Wind or give up 61.73% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.2%
Values	Daily Returns

Brenmiller Energy Ltd  vs.  Mass Megawat Wind

Brenmiller Energy

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Brenmiller Energy Ltd are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal basic indicators, Brenmiller Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Mass Megawat Wind

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mass Megawat Wind are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal primary indicators, Mass Megawat showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Brenmiller Energy and Mass Megawat

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

The idea behind Brenmiller Energy Ltd and Mass Megawat Wind 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.