Correlation Between Highest Performances and BRP
Can any of the company-specific risk be diversified away by investing in both Highest Performances and BRP 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 Highest Performances and BRP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highest Performances Holdings and BRP Inc, you can compare the effects of market volatilities on Highest Performances and BRP 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 Highest Performances with a short position of BRP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highest Performances and BRP.
Diversification Opportunities for Highest Performances and BRP
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Highest and BRP is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Highest Performances Holdings and BRP Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRP Inc and Highest Performances 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 Highest Performances Holdings are associated (or correlated) with BRP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRP Inc has no effect on the direction of Highest Performances i.e., Highest Performances and BRP go up and down completely randomly.
Pair Corralation between Highest Performances and BRP
Considering the 90-day investment horizon Highest Performances Holdings is expected to under-perform the BRP. In addition to that, Highest Performances is 3.31 times more volatile than BRP Inc. It trades about -0.05 of its total potential returns per unit of risk. BRP Inc is currently generating about -0.05 per unit of volatility. If you would invest 7,736 in BRP Inc on December 2, 2024 and sell it today you would lose (3,771) from holding BRP Inc or give up 48.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highest Performances Holdings vs. BRP Inc
Performance |
| Timeline |
| Highest Performances |
| BRP Inc |
Highest Performances and BRP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highest Performances and BRP
The main advantage of trading using opposite Highest Performances and BRP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highest Performances position performs unexpectedly, BRP 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 BRP will offset losses from the drop in BRP's long position.| Highest Performances vs. Qorvo Inc | ||
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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