Correlation Between Brainsway and Compugen

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

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

Diversification Opportunities for Brainsway and Compugen

-0.41

Correlation Coefficient

Brainsway  Compugen

Very good diversification

The 3 months correlation between Brainsway and Compugen is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Brainsway and Compugen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compugen and Brainsway 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 Brainsway are associated (or correlated) with Compugen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compugen has no effect on the direction of Brainsway i.e., Brainsway and Compugen go up and down completely randomly.

Pair Corralation between Brainsway and Compugen

Given the investment horizon of 90 days Brainsway is expected to generate 1.01 times more return on investment than Compugen. However, Brainsway is 1.01 times more volatile than Compugen. It trades about 0.17 of its potential returns per unit of risk. Compugen is currently generating about -0.15 per unit of risk. If you would invest  737.00  in Brainsway on September 5, 2024 and sell it today you would earn a total of  284.00  from holding Brainsway or generate 38.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	71.88%
Values	Daily Returns

Brainsway  vs.  Compugen

Brainsway

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Brainsway are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Brainsway showed solid returns over the last few months and may actually be approaching a breakup point.

Compugen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Compugen 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 basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Brainsway and Compugen

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

The idea behind Brainsway and Compugen 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 Stocks Directory module to find actively traded stocks across global markets.