Correlation Between FDG Electric and BRP

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

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

Diversification Opportunities for FDG Electric and BRP

0.0

Correlation Coefficient

FDG Electric  BRP

Pay attention - limited upside

The 3 months correlation between FDG and BRP is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding FDG Electric Vehicles and BRP Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRP Inc and FDG Electric 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 FDG Electric Vehicles 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 FDG Electric i.e., FDG Electric and BRP go up and down completely randomly.

Pair Corralation between FDG Electric and BRP

If you would invest  0.01  in FDG Electric Vehicles on September 30, 2024 and sell it today you would earn a total of  0.00  from holding FDG Electric Vehicles or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	96.97%
Values	Daily Returns

FDG Electric Vehicles  vs.  BRP Inc

FDG Electric Vehicles

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FDG Electric Vehicles has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, FDG Electric is not utilizing all of its potentials. The newest 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 uncertain performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with FDG Electric and BRP

The main advantage of trading using opposite FDG Electric and BRP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FDG Electric 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 FDG Electric Vehicles 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.