Correlation Between BRC and 456837AM5

Can any of the company-specific risk be diversified away by investing in both BRC and 456837AM5 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 BRC and 456837AM5 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BRC Inc and ING Groep NV, you can compare the effects of market volatilities on BRC and 456837AM5 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 BRC with a short position of 456837AM5. Check out your portfolio center. Please also check ongoing floating volatility patterns of BRC and 456837AM5.

Diversification Opportunities for BRC and 456837AM5

-0.14

Correlation Coefficient

BRC  456837AM5

Good diversification

The 3 months correlation between BRC and 456837AM5 is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding BRC Inc and ING Groep NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ING Groep NV and BRC 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 BRC Inc are associated (or correlated) with 456837AM5. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ING Groep NV has no effect on the direction of BRC i.e., BRC and 456837AM5 go up and down completely randomly.

Pair Corralation between BRC and 456837AM5

Given the investment horizon of 90 days BRC Inc is expected to under-perform the 456837AM5. In addition to that, BRC is 7.57 times more volatile than ING Groep NV. It trades about -0.11 of its total potential returns per unit of risk. ING Groep NV is currently generating about 0.01 per unit of volatility. If you would invest  9,835  in ING Groep NV on December 24, 2024 and sell it today you would earn a total of  22.00  from holding ING Groep NV or generate 0.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	86.89%
Values	Daily Returns

BRC Inc  vs.  ING Groep NV

BRC Inc

Risk-Adjusted Performance

Very Weak

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

ING Groep NV

Risk-Adjusted Performance

Very Weak

Over the last 90 days ING Groep NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 456837AM5 is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with BRC and 456837AM5

The main advantage of trading using opposite BRC and 456837AM5 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BRC position performs unexpectedly, 456837AM5 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 456837AM5 will offset losses from the drop in 456837AM5's long position.

The idea behind BRC Inc and ING Groep NV 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.