Correlation Between Brainchip Holdings and Alternative Investment

Can any of the company-specific risk be diversified away by investing in both Brainchip Holdings and Alternative Investment 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 Brainchip Holdings and Alternative Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Brainchip Holdings and Alternative Investment Trust, you can compare the effects of market volatilities on Brainchip Holdings and Alternative Investment 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 Brainchip Holdings with a short position of Alternative Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brainchip Holdings and Alternative Investment.

Diversification Opportunities for Brainchip Holdings and Alternative Investment

-0.52

Correlation Coefficient

Brainchip Holdings  Alternative Investment

Excellent diversification

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

Pair Corralation between Brainchip Holdings and Alternative Investment

Assuming the 90 days trading horizon Brainchip Holdings is expected to under-perform the Alternative Investment. In addition to that, Brainchip Holdings is 6.45 times more volatile than Alternative Investment Trust. It trades about -0.1 of its total potential returns per unit of risk. Alternative Investment Trust is currently generating about 0.1 per unit of volatility. If you would invest  140.00  in Alternative Investment Trust on December 25, 2024 and sell it today you would earn a total of  8.00  from holding Alternative Investment Trust or generate 5.71% return on investment over 90 days.

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

Brainchip Holdings  vs.  Alternative Investment Trust

Brainchip Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Brainchip Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Alternative Investment

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alternative Investment Trust are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Alternative Investment is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Brainchip Holdings and Alternative Investment

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

The idea behind Brainchip Holdings and Alternative Investment Trust 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.