Correlation Between Bonesupport Holding and BRP

Can any of the company-specific risk be diversified away by investing in both Bonesupport Holding 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 Bonesupport Holding and BRP into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bonesupport Holding AB and BRP Inc, you can compare the effects of market volatilities on Bonesupport Holding 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 Bonesupport Holding with a short position of BRP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bonesupport Holding and BRP.

Diversification Opportunities for Bonesupport Holding and BRP

-0.58

Correlation Coefficient

Bonesupport Holding  BRP

Excellent diversification

The 3 months correlation between Bonesupport and BRP is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Bonesupport Holding AB and BRP Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRP Inc and Bonesupport Holding 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 Bonesupport Holding AB 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 Bonesupport Holding i.e., Bonesupport Holding and BRP go up and down completely randomly.

Pair Corralation between Bonesupport Holding and BRP

Assuming the 90 days horizon Bonesupport Holding AB is expected to generate 1.16 times more return on investment than BRP. However, Bonesupport Holding is 1.16 times more volatile than BRP Inc. It trades about 0.03 of its potential returns per unit of risk. BRP Inc is currently generating about -0.09 per unit of risk. If you would invest  3,101  in Bonesupport Holding AB on September 21, 2024 and sell it today you would earn a total of  115.00  from holding Bonesupport Holding AB or generate 3.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Bonesupport Holding AB  vs.  BRP Inc

Bonesupport Holding

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bonesupport Holding AB are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Bonesupport Holding is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

BRP Inc

Risk-Adjusted Performance

0 of 100

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 latest weak performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Bonesupport Holding and BRP

The main advantage of trading using opposite Bonesupport Holding and BRP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bonesupport Holding 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 Bonesupport Holding AB 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.

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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.