Correlation Between BRP and Onewater Marine
Can any of the company-specific risk be diversified away by investing in both BRP and Onewater Marine 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 Onewater Marine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BRP Inc and Onewater Marine, you can compare the effects of market volatilities on BRP and Onewater Marine 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 Onewater Marine. Check out your portfolio center. Please also check ongoing floating volatility patterns of BRP and Onewater Marine.
Diversification Opportunities for BRP and Onewater Marine
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BRP and Onewater is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding BRP Inc and Onewater Marine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Onewater Marine 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 Onewater Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Onewater Marine has no effect on the direction of BRP i.e., BRP and Onewater Marine go up and down completely randomly.
Pair Corralation between BRP and Onewater Marine
Given the investment horizon of 90 days BRP Inc is expected to under-perform the Onewater Marine. But the stock apears to be less risky and, when comparing its historical volatility, BRP Inc is 3.25 times less risky than Onewater Marine. The stock trades about -0.17 of its potential returns per unit of risk. The Onewater Marine is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 2,096 in Onewater Marine on August 24, 2024 and sell it today you would lose (94.00) from holding Onewater Marine or give up 4.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BRP Inc vs. Onewater Marine
Performance |
| Timeline |
| BRP Inc |
| Onewater Marine |
BRP and Onewater Marine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BRP and Onewater Marine
The main advantage of trading using opposite BRP and Onewater Marine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BRP position performs unexpectedly, Onewater Marine 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 Onewater Marine will offset losses from the drop in Onewater Marine's long position.The idea behind BRP Inc and Onewater Marine 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.| Onewater Marine vs. LCI Industries | Onewater Marine vs. MCBC Holdings | Onewater Marine vs. BRP Inc | Onewater Marine vs. Malibu Boats |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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