Correlation Between Brenmiller Energy and Univest Pennsylvania

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

Diversification Opportunities for Brenmiller Energy and Univest Pennsylvania

-0.52

Correlation Coefficient

Brenmiller Energy  Univest Pennsylvania

Excellent diversification

The 3 months correlation between Brenmiller and Univest is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Brenmiller Energy Ltd and Univest Pennsylvania in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Univest Pennsylvania 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 Univest Pennsylvania. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Univest Pennsylvania has no effect on the direction of Brenmiller Energy i.e., Brenmiller Energy and Univest Pennsylvania go up and down completely randomly.

Pair Corralation between Brenmiller Energy and Univest Pennsylvania

Given the investment horizon of 90 days Brenmiller Energy Ltd is expected to under-perform the Univest Pennsylvania. In addition to that, Brenmiller Energy is 3.91 times more volatile than Univest Pennsylvania. It trades about -0.04 of its total potential returns per unit of risk. Univest Pennsylvania is currently generating about 0.12 per unit of volatility. If you would invest  3,077  in Univest Pennsylvania on September 18, 2024 and sell it today you would earn a total of  82.00  from holding Univest Pennsylvania or generate 2.66% return on investment over 90 days.

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

Brenmiller Energy Ltd  vs.  Univest Pennsylvania

Brenmiller Energy

Risk-Adjusted Performance

0 of 100

Very Weak

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

Univest Pennsylvania

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Univest Pennsylvania are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile basic indicators, Univest Pennsylvania reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Brenmiller Energy and Univest Pennsylvania

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

The idea behind Brenmiller Energy Ltd and Univest Pennsylvania 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.