Correlation Between Brainsway and Aura Smart

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

By analyzing existing cross correlation between Brainsway and Aura Smart Air, you can compare the effects of market volatilities on Brainsway and Aura Smart 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 Brainsway with a short position of Aura Smart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brainsway and Aura Smart.

Diversification Opportunities for Brainsway and Aura Smart

0.0

Correlation Coefficient

Brainsway  Aura Smart

Pay attention - limited upside

The 3 months correlation between Brainsway and Aura is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Brainsway and Aura Smart Air in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aura Smart Air and Brainsway 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 Brainsway are associated (or correlated) with Aura Smart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aura Smart Air has no effect on the direction of Brainsway i.e., Brainsway and Aura Smart go up and down completely randomly.

Pair Corralation between Brainsway and Aura Smart

If you would invest  124.00  in Aura Smart Air on March 28, 2024 and sell it today you would earn a total of  0.00  from holding Aura Smart Air or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Brainsway  vs.  Aura Smart Air

Brainsway

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Brainsway has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Brainsway is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Aura Smart Air

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aura Smart Air has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in July 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Brainsway and Aura Smart

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

The idea behind Brainsway and Aura Smart Air 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.