Correlation Between Brainstorm Cell and Babcock Wilcox

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

Diversification Opportunities for Brainstorm Cell and Babcock Wilcox

-0.26
  Correlation Coefficient

Very good diversification

The 3 months correlation between Brainstorm and Babcock is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Brainstorm Cell Therapeutics and Babcock Wilcox Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Babcock Wilcox Enter and Brainstorm Cell 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 Brainstorm Cell Therapeutics are associated (or correlated) with Babcock Wilcox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Babcock Wilcox Enter has no effect on the direction of Brainstorm Cell i.e., Brainstorm Cell and Babcock Wilcox go up and down completely randomly.

Pair Corralation between Brainstorm Cell and Babcock Wilcox

Given the investment horizon of 90 days Brainstorm Cell Therapeutics is expected to generate 1.0 times more return on investment than Babcock Wilcox. However, Brainstorm Cell Therapeutics is 1.0 times less risky than Babcock Wilcox. It trades about 0.21 of its potential returns per unit of risk. Babcock Wilcox Enterprises is currently generating about 0.02 per unit of risk. If you would invest  37.00  in Brainstorm Cell Therapeutics on December 30, 2023 and sell it today you would earn a total of  19.00  from holding Brainstorm Cell Therapeutics or generate 51.35% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Brainstorm Cell Therapeutics  vs.  Babcock Wilcox Enterprises

 Performance 
       Timeline  
Brainstorm Cell Ther 

Risk-Adjusted Performance

13 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Brainstorm Cell Therapeutics are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating essential indicators, Brainstorm Cell demonstrated solid returns over the last few months and may actually be approaching a breakup point.
Babcock Wilcox Enter 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Babcock Wilcox Enterprises has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Babcock Wilcox is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Brainstorm Cell and Babcock Wilcox Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Brainstorm Cell and Babcock Wilcox

The main advantage of trading using opposite Brainstorm Cell and Babcock Wilcox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brainstorm Cell position performs unexpectedly, Babcock Wilcox 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 Babcock Wilcox will offset losses from the drop in Babcock Wilcox's long position.
The idea behind Brainstorm Cell Therapeutics and Babcock Wilcox Enterprises 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.
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 the Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.

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