Correlation Between Brimstone Investment and Advtech

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

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

Diversification Opportunities for Brimstone Investment and Advtech

-0.5

Correlation Coefficient

Brimstone Investment  Advtech

Very good diversification

The 3 months correlation between Brimstone and Advtech is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Brimstone Investment and Advtech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advtech and Brimstone Investment 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 Brimstone Investment are associated (or correlated) with Advtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advtech has no effect on the direction of Brimstone Investment i.e., Brimstone Investment and Advtech go up and down completely randomly.

Pair Corralation between Brimstone Investment and Advtech

Assuming the 90 days trading horizon Brimstone Investment is expected to under-perform the Advtech. In addition to that, Brimstone Investment is 3.87 times more volatile than Advtech. It trades about -0.02 of its total potential returns per unit of risk. Advtech is currently generating about 0.09 per unit of volatility. If you would invest  308,100  in Advtech on September 13, 2024 and sell it today you would earn a total of  21,900  from holding Advtech or generate 7.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Brimstone Investment  vs.  Advtech

Brimstone Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brimstone Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Brimstone Investment is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Advtech

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Advtech are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Advtech may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Brimstone Investment and Advtech

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

The idea behind Brimstone Investment and Advtech 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.