Correlation Between Onex Corp and BRP
Can any of the company-specific risk be diversified away by investing in both Onex Corp 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 Onex Corp and BRP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Onex Corp and BRP Inc, you can compare the effects of market volatilities on Onex Corp 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 Onex Corp with a short position of BRP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Onex Corp and BRP.
Diversification Opportunities for Onex Corp and BRP
Average diversification
The 3 months correlation between Onex and BRP is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Onex Corp and BRP Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRP Inc and Onex Corp 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 Onex Corp 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 Onex Corp i.e., Onex Corp and BRP go up and down completely randomly.
Pair Corralation between Onex Corp and BRP
Assuming the 90 days trading horizon Onex Corp is expected to generate 1.65 times less return on investment than BRP. In addition to that, Onex Corp is 1.28 times more volatile than BRP Inc. It trades about 0.1 of its total potential returns per unit of risk. BRP Inc is currently generating about 0.22 per unit of volatility. If you would invest 7,271 in BRP Inc on October 24, 2024 and sell it today you would earn a total of 425.00 from holding BRP Inc or generate 5.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Onex Corp vs. BRP Inc
Performance |
| Timeline |
| Onex Corp |
| BRP Inc |
Onex Corp and BRP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Onex Corp and BRP
The main advantage of trading using opposite Onex Corp and BRP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Onex Corp 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.| Onex Corp vs. Intact Financial | Onex Corp vs. Open Text Corp | Onex Corp vs. Waste Connections | Onex Corp vs. Fairfax Financial Holdings |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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