Correlation Between Brainsway and LIFW Old

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

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

Diversification Opportunities for Brainsway and LIFW Old

0.0

Correlation Coefficient

Brainsway  LIFW Old

Pay attention - limited upside

The 3 months correlation between Brainsway and LIFW is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Brainsway and LIFW Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LIFW Old 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 LIFW Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LIFW Old has no effect on the direction of Brainsway i.e., Brainsway and LIFW Old go up and down completely randomly.

Pair Corralation between Brainsway and LIFW Old

If you would invest  922.00  in Brainsway on December 28, 2024 and sell it today you would earn a total of  8.00  from holding Brainsway or generate 0.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Brainsway  vs.  LIFW Old

Brainsway

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Brainsway are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Brainsway is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

LIFW Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days LIFW Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, LIFW Old is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Brainsway and LIFW Old

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

The idea behind Brainsway and LIFW Old 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.