Correlation Between Lake Resources and Brenmiller Energy

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

Diversification Opportunities for Lake Resources and Brenmiller Energy

0.01
  Correlation Coefficient

Significant diversification

The 3 months correlation between LLKKF and Brenmiller is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Lake Resources NL and Brenmiller Energy Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brenmiller Energy and Lake Resources 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 Lake Resources NL 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 Lake Resources i.e., Lake Resources and Brenmiller Energy go up and down completely randomly.

Pair Corralation between Lake Resources and Brenmiller Energy

Assuming the 90 days horizon Lake Resources is expected to generate 7.86 times less return on investment than Brenmiller Energy. But when comparing it to its historical volatility, Lake Resources NL is 9.58 times less risky than Brenmiller Energy. It trades about 0.09 of its potential returns per unit of risk. Brenmiller Energy is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  0.00  in Brenmiller Energy on September 9, 2022 and sell it today you would earn a total of  164.00  from holding Brenmiller Energy or generate 9.223372036854776E16% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy27.82%
ValuesDaily Returns

Lake Resources NL  vs.  Brenmiller Energy Ltd

 Performance (%) 
       Timeline  
Lake Resources NL 
LLKKF Performance
0 of 100
Over the last 90 days Lake Resources NL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's forward-looking signals remain rather sound which may send shares a bit higher in January 2023. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

LLKKF Price Channel

Brenmiller Energy 
Brenmiller Performance
0 of 100
Over the last 90 days Brenmiller Energy 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 rather sound which may send shares a bit higher in January 2023. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Brenmiller Price Channel

Lake Resources and Brenmiller Energy Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Lake Resources and Brenmiller Energy

The main advantage of trading using opposite Lake Resources and Brenmiller Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lake Resources 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.
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The idea behind Lake Resources NL 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.
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..

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