Correlation Between Modine Manufacturing and BRP

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Modine Manufacturing 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 Modine Manufacturing and BRP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Modine Manufacturing and BRP Inc, you can compare the effects of market volatilities on Modine Manufacturing 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 Modine Manufacturing with a short position of BRP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Modine Manufacturing and BRP.

Diversification Opportunities for Modine Manufacturing and BRP

-0.01
  Correlation Coefficient

Good diversification

The 3 months correlation between Modine and BRP is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Modine Manufacturing and BRP Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRP Inc and Modine Manufacturing 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 Modine Manufacturing 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 Modine Manufacturing i.e., Modine Manufacturing and BRP go up and down completely randomly.

Pair Corralation between Modine Manufacturing and BRP

Considering the 90-day investment horizon Modine Manufacturing is expected to under-perform the BRP. In addition to that, Modine Manufacturing is 2.99 times more volatile than BRP Inc. It trades about -0.11 of its total potential returns per unit of risk. BRP Inc is currently generating about -0.2 per unit of volatility. If you would invest  5,249  in BRP Inc on November 7, 2024 and sell it today you would lose (468.00) from holding BRP Inc or give up 8.92% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Modine Manufacturing  vs.  BRP Inc

 Performance 
       Timeline  
Modine Manufacturing 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Modine Manufacturing has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in March 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.
BRP Inc 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days BRP Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, BRP is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Modine Manufacturing and BRP Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Modine Manufacturing and BRP

The main advantage of trading using opposite Modine Manufacturing and BRP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Modine Manufacturing 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.
The idea behind Modine Manufacturing and BRP Inc 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.
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

Other Complementary Tools

Sectors
List of equity sectors categorizing publicly traded companies based on their primary business activities
Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk
Price Ceiling Movement
Calculate and plot Price Ceiling Movement for different equity instruments
Top Crypto Exchanges
Search and analyze digital assets across top global cryptocurrency exchanges
ETFs
Find actively traded Exchange Traded Funds (ETF) from around the world