Correlation Between Intelicanna and Brainsway

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

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

Diversification Opportunities for Intelicanna and Brainsway

0.38

Correlation Coefficient

Intelicanna  Brainsway

Weak diversification

The 3 months correlation between Intelicanna and Brainsway is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Intelicanna and Brainsway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brainsway and Intelicanna 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 Intelicanna 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 Intelicanna i.e., Intelicanna and Brainsway go up and down completely randomly.

Pair Corralation between Intelicanna and Brainsway

Assuming the 90 days trading horizon Intelicanna is expected to generate 2.71 times more return on investment than Brainsway. However, Intelicanna is 2.71 times more volatile than Brainsway. It trades about 0.09 of its potential returns per unit of risk. Brainsway is currently generating about -0.04 per unit of risk. If you would invest  6,870  in Intelicanna on December 2, 2024 and sell it today you would earn a total of  1,630  from holding Intelicanna or generate 23.73% return on investment over 90 days.

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

Intelicanna  vs.  Brainsway

Intelicanna

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Intelicanna are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Intelicanna sustained solid returns over the last few months and may actually be approaching a breakup point.

Brainsway

Risk-Adjusted Performance

Very Weak

Over the last 90 days Brainsway has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Intelicanna and Brainsway

The main advantage of trading using opposite Intelicanna and Brainsway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intelicanna 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 Intelicanna 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.

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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.