Correlation Between BRP Old and Arthur J

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

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

Diversification Opportunities for BRP Old and Arthur J

-0.48

Correlation Coefficient

BRP Old  Arthur J

Very good diversification

The 3 months correlation between BRP and Arthur is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding BRP Old and Arthur J Gallagher in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arthur J Gallagher and BRP Old 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 BRP Old are associated (or correlated) with Arthur J. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arthur J Gallagher has no effect on the direction of BRP Old i.e., BRP Old and Arthur J go up and down completely randomly.

Pair Corralation between BRP Old and Arthur J

If you would invest  28,451  in Arthur J Gallagher on October 24, 2024 and sell it today you would earn a total of  1,031  from holding Arthur J Gallagher or generate 3.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	5.56%
Values	Daily Returns

BRP Old  vs.  Arthur J Gallagher

BRP Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BRP Old has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, BRP Old is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Arthur J Gallagher

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Arthur J Gallagher are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable forward-looking indicators, Arthur J is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with BRP Old and Arthur J

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

The idea behind BRP Old and Arthur J Gallagher 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.