Correlation Between Brenmiller Energy and Tokyo Electric

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

Diversification Opportunities for Brenmiller Energy and Tokyo Electric

-0.18

Correlation Coefficient

Brenmiller Energy  Tokyo Electric

Good diversification

The 3 months correlation between Brenmiller and Tokyo is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Brenmiller Energy Ltd and Tokyo Electric Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tokyo Electric Power 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 Tokyo Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tokyo Electric Power has no effect on the direction of Brenmiller Energy i.e., Brenmiller Energy and Tokyo Electric go up and down completely randomly.

Pair Corralation between Brenmiller Energy and Tokyo Electric

Given the investment horizon of 90 days Brenmiller Energy Ltd is expected to generate 1.8 times more return on investment than Tokyo Electric. However, Brenmiller Energy is 1.8 times more volatile than Tokyo Electric Power. It trades about 0.37 of its potential returns per unit of risk. Tokyo Electric Power is currently generating about -0.11 per unit of risk. If you would invest  82.00  in Brenmiller Energy Ltd on October 5, 2024 and sell it today you would earn a total of  75.00  from holding Brenmiller Energy Ltd or generate 91.46% return on investment over 90 days.

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

Brenmiller Energy Ltd  vs.  Tokyo Electric Power

Brenmiller Energy

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Brenmiller Energy Ltd are ranked lower than 15 (%) 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.

Tokyo Electric Power

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tokyo Electric Power has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Brenmiller Energy and Tokyo Electric

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

The idea behind Brenmiller Energy Ltd and Tokyo Electric Power 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.