Correlation Between Brainstorm Cell and NRG Energy

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

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

Diversification Opportunities for Brainstorm Cell and NRG Energy

-0.54

Correlation Coefficient

Brainstorm Cell  NRG Energy

Excellent diversification

The 3 months correlation between Brainstorm and NRG is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Brainstorm Cell Therapeutics and NRG Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NRG Energy and Brainstorm Cell 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 Brainstorm Cell Therapeutics are associated (or correlated) with NRG Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NRG Energy has no effect on the direction of Brainstorm Cell i.e., Brainstorm Cell and NRG Energy go up and down completely randomly.

Pair Corralation between Brainstorm Cell and NRG Energy

If you would invest  269.00  in Brainstorm Cell Therapeutics on September 22, 2024 and sell it today you would earn a total of  0.00  from holding Brainstorm Cell Therapeutics or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	36.36%
Values	Daily Returns

Brainstorm Cell Therapeutics  vs.  NRG Energy

Brainstorm Cell Ther

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brainstorm Cell Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

NRG Energy

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in NRG Energy are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, NRG Energy may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Brainstorm Cell and NRG Energy

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

The idea behind Brainstorm Cell Therapeutics and NRG Energy 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.