Correlation Between Brp and Selectquote
Can any of the company-specific risk be diversified away by investing in both Brp and Selectquote 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 and Selectquote into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brp Group and Selectquote, you can compare the effects of market volatilities on Brp and Selectquote 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 with a short position of Selectquote. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brp and Selectquote.
Diversification Opportunities for Brp and Selectquote
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Brp and Selectquote is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Brp Group and Selectquote in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Selectquote and Brp 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 Group are associated (or correlated) with Selectquote. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Selectquote has no effect on the direction of Brp i.e., Brp and Selectquote go up and down completely randomly.
Pair Corralation between Brp and Selectquote
Considering the 90-day investment horizon Brp Group is expected to under-perform the Selectquote. But the stock apears to be less risky and, when comparing its historical volatility, Brp Group is 2.94 times less risky than Selectquote. The stock trades about -0.01 of its potential returns per unit of risk. The Selectquote is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 76.00 in Selectquote on August 28, 2024 and sell it today you would earn a total of 222.00 from holding Selectquote or generate 292.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 28.78% |
| Values | Daily Returns |
Brp Group vs. Selectquote
Performance |
| Timeline |
| Brp Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Selectquote |
Brp and Selectquote Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brp and Selectquote
The main advantage of trading using opposite Brp and Selectquote positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brp position performs unexpectedly, Selectquote 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 Selectquote will offset losses from the drop in Selectquote's long position.| Brp vs. Arthur J Gallagher | Brp vs. Marsh McLennan Companies | Brp vs. Willis Towers Watson | Brp vs. Erie Indemnity |
| Selectquote vs. CorVel Corp | Selectquote vs. eHealth | Selectquote vs. Aquagold International | Selectquote vs. Morningstar Unconstrained Allocation |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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