Correlation Between Western Copper and Brenmiller Energy

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

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

Diversification Opportunities for Western Copper and Brenmiller Energy

0.36

Correlation Coefficient

Western Copper  Brenmiller Energy

Weak diversification

The 3 months correlation between Western and Brenmiller is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Western Copper and and Brenmiller Energy Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brenmiller Energy and Western Copper 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 Western Copper and 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 Western Copper i.e., Western Copper and Brenmiller Energy go up and down completely randomly.

Pair Corralation between Western Copper and Brenmiller Energy

Considering the 90-day investment horizon Western Copper and is expected to under-perform the Brenmiller Energy. But the stock apears to be less risky and, when comparing its historical volatility, Western Copper and is 5.23 times less risky than Brenmiller Energy. The stock trades about -0.02 of its potential returns per unit of risk. The Brenmiller Energy Ltd is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  90.00  in Brenmiller Energy Ltd on September 24, 2024 and sell it today you would lose (14.70) from holding Brenmiller Energy Ltd or give up 16.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.21%
Values	Daily Returns

Western Copper and  vs.  Brenmiller Energy Ltd

Western Copper

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Western Copper and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Brenmiller Energy

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Western Copper and Brenmiller Energy

The main advantage of trading using opposite Western Copper and Brenmiller Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Copper 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 Western Copper and 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.