Correlation Between Brooge Holdings and Avance Gas

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

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

Diversification Opportunities for Brooge Holdings and Avance Gas

0.13

Correlation Coefficient

Brooge Holdings  Avance Gas

Average diversification

The 3 months correlation between Brooge and Avance is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Brooge Holdings and Avance Gas Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avance Gas Holding and Brooge 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 Brooge Holdings are associated (or correlated) with Avance Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avance Gas Holding has no effect on the direction of Brooge Holdings i.e., Brooge Holdings and Avance Gas go up and down completely randomly.

Pair Corralation between Brooge Holdings and Avance Gas

Given the investment horizon of 90 days Brooge Holdings is expected to under-perform the Avance Gas. But the stock apears to be less risky and, when comparing its historical volatility, Brooge Holdings is 1.2 times less risky than Avance Gas. The stock trades about -0.02 of its potential returns per unit of risk. The Avance Gas Holding is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  430.00  in Avance Gas Holding on October 5, 2024 and sell it today you would earn a total of  361.00  from holding Avance Gas Holding or generate 83.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.34%
Values	Daily Returns

Brooge Holdings  vs.  Avance Gas Holding

Brooge Holdings

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Brooge Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Brooge Holdings may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Avance Gas Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Avance Gas Holding 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 Brooge Holdings and Avance Gas

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

The idea behind Brooge Holdings and Avance Gas Holding 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.