Correlation Between American Defense and Brenmiller Energy

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

Diversification Opportunities for American Defense and Brenmiller Energy

-0.02
  Correlation Coefficient

Good diversification

The 3 months correlation between American and Brenmiller is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding American Defense Systems and Brenmiller Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brenmiller Energy and American Defense 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 American Defense Systems 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 American Defense i.e., American Defense and Brenmiller Energy go up and down completely randomly.

Pair Corralation between American Defense and Brenmiller Energy

Given the investment horizon of 90 days American Defense Systems is expected to under-perform the Brenmiller Energy. In addition to that, American Defense is 6.91 times more volatile than Brenmiller Energy. It trades about -0.22 of its total potential returns per unit of risk. Brenmiller Energy is currently generating about -0.09 per unit of volatility. If you would invest  396.00  in Brenmiller Energy on June 30, 2022 and sell it today you would lose (23.00)  from holding Brenmiller Energy or give up 5.81% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy95.45%
ValuesDaily Returns

American Defense Systems  vs.  Brenmiller Energy

 Performance (%) 
       Timeline  
American Defense Systems 
American Performance
0 of 100
Over the last 90 days American Defense Systems has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in October 2022. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

American Price Channel

Brenmiller Energy 
Brenmiller Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Brenmiller Energy are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal basic indicators, Brenmiller Energy may actually be approaching a critical reversion point that can send shares even higher in October 2022.

Brenmiller Price Channel

American Defense and Brenmiller Energy Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with American Defense and Brenmiller Energy

The main advantage of trading using opposite American Defense and Brenmiller Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Defense 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.
American Defense vs. Kibush Capital Corp
The idea behind American Defense Systems 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. Clearwater Paper Corp
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

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