Correlation Between BRP Old and Arthur J
Can any of the company-specific risk be diversified away by investing in both BRP Old and Arthur J 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 BRP Old and Arthur J into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BRP Old and Arthur J Gallagher, you can compare the effects of market volatilities on BRP Old and Arthur J 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 BRP Old with a short position of Arthur J. Check out your portfolio center. Please also check ongoing floating volatility patterns of BRP Old and Arthur J.
Diversification Opportunities for BRP Old and Arthur J
Excellent diversification
The 3 months correlation between BRP and Arthur is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding BRP Old and Arthur J Gallagher in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arthur J Gallagher and BRP Old 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 BRP Old are associated (or correlated) with Arthur J. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arthur J Gallagher has no effect on the direction of BRP Old i.e., BRP Old and Arthur J go up and down completely randomly.
Pair Corralation between BRP Old and Arthur J
Considering the 90-day investment horizon BRP Old is expected to generate 2.09 times more return on investment than Arthur J. However, BRP Old is 2.09 times more volatile than Arthur J Gallagher. It trades about 0.06 of its potential returns per unit of risk. Arthur J Gallagher is currently generating about 0.1 per unit of risk. If you would invest 2,330 in BRP Old on November 1, 2024 and sell it today you would earn a total of 273.00 from holding BRP Old or generate 11.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 19.62% |
| Values | Daily Returns |
BRP Old vs. Arthur J Gallagher
Performance |
| Timeline |
| BRP Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Arthur J Gallagher |
BRP Old and Arthur J Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BRP Old and Arthur J
The main advantage of trading using opposite BRP Old and Arthur J positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BRP Old position performs unexpectedly, Arthur J 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 Arthur J will offset losses from the drop in Arthur J's long position.| BRP Old vs. Arthur J Gallagher | BRP Old vs. Marsh McLennan Companies | BRP Old vs. Willis Towers Watson | BRP Old vs. Erie Indemnity |
| Arthur J vs. Aon PLC | Arthur J vs. Brown Brown | Arthur J vs. Willis Towers Watson | Arthur J vs. Erie Indemnity |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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