Correlation Between Abb and Brenmiller Energy

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Can any of the company-specific risk be diversified away by investing in both Abb 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 Abb and Brenmiller Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abb Ltd ADR and Brenmiller Energy, you can compare the effects of market volatilities on Abb 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 Abb with a short position of Brenmiller Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abb and Brenmiller Energy.

Diversification Opportunities for Abb and Brenmiller Energy

0.58
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Abb and Brenmiller is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Abb Ltd ADR and Brenmiller Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brenmiller Energy and Abb 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 Abb Ltd ADR 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 Abb i.e., Abb and Brenmiller Energy go up and down completely randomly.

Pair Corralation between Abb and Brenmiller Energy

Considering the 90-day investment horizon Abb Ltd ADR is expected to under-perform the Brenmiller Energy. But the stock apears to be less risky and, when comparing its historical volatility, Abb Ltd ADR is 1.61 times less risky than Brenmiller Energy. The stock trades about -0.28 of its potential returns per unit of risk. The Brenmiller Energy is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest  394.00  in Brenmiller Energy on June 27, 2022 and sell it today you would lose (29.00)  from holding Brenmiller Energy or give up 7.36% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy95.45%
ValuesDaily Returns

Abb Ltd ADR  vs.  Brenmiller Energy

 Performance (%) 
       Timeline  
Abb Ltd ADR 
Abb Performance
0 of 100
Over the last 90 days Abb Ltd ADR has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Abb is not utilizing all of its potentials. The new stock price disturbance, may contribute to short-term losses for the investors.

Abb Price Channel

Brenmiller Energy 
Brenmiller Performance
5 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Brenmiller Energy are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Brenmiller Energy exhibited solid returns over the last few months and may actually be approaching a breakup point.

Brenmiller Price Channel

Abb and Brenmiller Energy Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Abb and Brenmiller Energy

The main advantage of trading using opposite Abb and Brenmiller Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abb 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.
Abb vs. Sigma Lithium Corp
The idea behind Abb Ltd ADR and Brenmiller 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.
Brenmiller Energy vs. BUSHVELD MINERALS LTD
Check out your portfolio center. 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.

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