Correlation Between Aker Carbon and Braveheart Resources

Can any of the company-specific risk be diversified away by investing in both Aker Carbon and Braveheart Resources 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 Aker Carbon and Braveheart Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aker Carbon Capture and Braveheart Resources, you can compare the effects of market volatilities on Aker Carbon and Braveheart Resources 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 Aker Carbon with a short position of Braveheart Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aker Carbon and Braveheart Resources.

Diversification Opportunities for Aker Carbon and Braveheart Resources

-0.27

Correlation Coefficient

Aker Carbon  Braveheart Resources

Very good diversification

The 3 months correlation between Aker and Braveheart is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Aker Carbon Capture and Braveheart Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Braveheart Resources and Aker Carbon 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 Aker Carbon Capture are associated (or correlated) with Braveheart Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Braveheart Resources has no effect on the direction of Aker Carbon i.e., Aker Carbon and Braveheart Resources go up and down completely randomly.

Pair Corralation between Aker Carbon and Braveheart Resources

Assuming the 90 days horizon Aker Carbon Capture is expected to under-perform the Braveheart Resources. In addition to that, Aker Carbon is 1.96 times more volatile than Braveheart Resources. It trades about -0.02 of its total potential returns per unit of risk. Braveheart Resources is currently generating about 0.02 per unit of volatility. If you would invest  2.18  in Braveheart Resources on May 6, 2025 and sell it today you would lose (0.36) from holding Braveheart Resources or give up 16.51% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Aker Carbon Capture  vs.  Braveheart Resources

Aker Carbon Capture

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aker Carbon Capture has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Braveheart Resources

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Braveheart Resources are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Braveheart Resources may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Aker Carbon and Braveheart Resources

The main advantage of trading using opposite Aker Carbon and Braveheart Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aker Carbon position performs unexpectedly, Braveheart Resources 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 Braveheart Resources will offset losses from the drop in Braveheart Resources' long position.

The idea behind Aker Carbon Capture and Braveheart Resources 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.