Correlation Between Rocky Brands and Brenmiller Energy

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

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

Diversification Opportunities for Rocky Brands and Brenmiller Energy

0.2

Correlation Coefficient

Rocky Brands  Brenmiller Energy

Modest diversification

The 3 months correlation between Rocky and Brenmiller is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Rocky Brands and Brenmiller Energy Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brenmiller Energy and Rocky Brands 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 Rocky Brands are associated (or correlated) with Brenmiller Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brenmiller Energy has no effect on the direction of Rocky Brands i.e., Rocky Brands and Brenmiller Energy go up and down completely randomly.

Pair Corralation between Rocky Brands and Brenmiller Energy

Given the investment horizon of 90 days Rocky Brands is expected to under-perform the Brenmiller Energy. But the stock apears to be less risky and, when comparing its historical volatility, Rocky Brands is 4.12 times less risky than Brenmiller Energy. The stock trades about -0.14 of its potential returns per unit of risk. The Brenmiller Energy Ltd is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  107.00  in Brenmiller Energy Ltd on December 26, 2024 and sell it today you would earn a total of  25.00  from holding Brenmiller Energy Ltd or generate 23.36% return on investment over 90 days.

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

Rocky Brands  vs.  Brenmiller Energy Ltd

Rocky Brands

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rocky Brands has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward-looking signals remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Brenmiller Energy

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Brenmiller Energy Ltd are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Brenmiller Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Rocky Brands and Brenmiller Energy

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

The idea behind Rocky Brands and Brenmiller Energy Ltd 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.