Correlation Between Redefine Properties and Brait SE

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

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

Diversification Opportunities for Redefine Properties and Brait SE

0.67

Correlation Coefficient

Redefine Properties  Brait SE

Poor diversification

The 3 months correlation between Redefine and Brait is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Redefine Properties and Brait SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brait SE and Redefine Properties 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 Redefine Properties are associated (or correlated) with Brait SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brait SE has no effect on the direction of Redefine Properties i.e., Redefine Properties and Brait SE go up and down completely randomly.

Pair Corralation between Redefine Properties and Brait SE

Assuming the 90 days trading horizon Redefine Properties is expected to under-perform the Brait SE. In addition to that, Redefine Properties is 1.17 times more volatile than Brait SE. It trades about -0.06 of its total potential returns per unit of risk. Brait SE is currently generating about -0.01 per unit of volatility. If you would invest  20,600  in Brait SE on December 28, 2024 and sell it today you would lose (200.00) from holding Brait SE or give up 0.97% of portfolio value over 90 days.

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

Redefine Properties  vs.  Brait SE

Redefine Properties

Risk-Adjusted Performance

Very Weak

Over the last 90 days Redefine Properties has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Redefine Properties is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Brait SE

Risk-Adjusted Performance

Very Weak

Over the last 90 days Brait SE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Brait SE is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Redefine Properties and Brait SE

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

The idea behind Redefine Properties and Brait SE 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.