Correlation Between BRP and Jeffs Brands
Can any of the company-specific risk be diversified away by investing in both BRP and Jeffs Brands 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 Jeffs Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BRP Inc and Jeffs Brands, you can compare the effects of market volatilities on BRP and Jeffs Brands 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 Jeffs Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of BRP and Jeffs Brands.
Diversification Opportunities for BRP and Jeffs Brands
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BRP and Jeffs is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding BRP Inc and Jeffs Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeffs Brands 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 Inc are associated (or correlated) with Jeffs Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeffs Brands has no effect on the direction of BRP i.e., BRP and Jeffs Brands go up and down completely randomly.
Pair Corralation between BRP and Jeffs Brands
Given the investment horizon of 90 days BRP Inc is expected to under-perform the Jeffs Brands. But the stock apears to be less risky and, when comparing its historical volatility, BRP Inc is 20.45 times less risky than Jeffs Brands. The stock trades about -0.02 of its potential returns per unit of risk. The Jeffs Brands is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 861.00 in Jeffs Brands on September 13, 2024 and sell it today you would lose (602.00) from holding Jeffs Brands or give up 69.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BRP Inc vs. Jeffs Brands
Performance |
| Timeline |
| BRP Inc |
| Jeffs Brands |
BRP and Jeffs Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BRP and Jeffs Brands
The main advantage of trading using opposite BRP and Jeffs Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BRP position performs unexpectedly, Jeffs Brands 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 Jeffs Brands will offset losses from the drop in Jeffs Brands' long position.The idea behind BRP Inc and Jeffs Brands 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.| Jeffs Brands vs. Twilio Inc | Jeffs Brands vs. Getty Images Holdings | Jeffs Brands vs. Baidu Inc | Jeffs Brands vs. Snap Inc |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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