Correlation Between Delcath Systems and Brainsway

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

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

Diversification Opportunities for Delcath Systems and Brainsway

0.26

Correlation Coefficient

Delcath Systems  Brainsway

Modest diversification

The 3 months correlation between Delcath and Brainsway is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Delcath Systems and Brainsway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brainsway and Delcath Systems 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 Delcath Systems are associated (or correlated) with Brainsway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brainsway has no effect on the direction of Delcath Systems i.e., Delcath Systems and Brainsway go up and down completely randomly.

Pair Corralation between Delcath Systems and Brainsway

Given the investment horizon of 90 days Delcath Systems is expected to generate 2.04 times less return on investment than Brainsway. In addition to that, Delcath Systems is 1.02 times more volatile than Brainsway. It trades about 0.07 of its total potential returns per unit of risk. Brainsway is currently generating about 0.15 per unit of volatility. If you would invest  745.00  in Brainsway on September 2, 2024 and sell it today you would earn a total of  242.00  from holding Brainsway or generate 32.48% return on investment over 90 days.

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

Delcath Systems  vs.  Brainsway

Delcath Systems

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Delcath Systems are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Delcath Systems demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Brainsway

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Brainsway are ranked lower than 11 (%) 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.

Pair Trading with Delcath Systems and Brainsway

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

The idea behind Delcath Systems and Brainsway 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.