Correlation Between BRP Old and Crawford

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

By analyzing existing cross correlation between BRP Old and Crawford Company, you can compare the effects of market volatilities on BRP Old and Crawford 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 Crawford. Check out your portfolio center. Please also check ongoing floating volatility patterns of BRP Old and Crawford.

Diversification Opportunities for BRP Old and Crawford

-0.31

Correlation Coefficient

BRP Old  Crawford

Very good diversification

The 3 months correlation between BRP and Crawford is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding BRP Old and Crawford Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crawford 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 Crawford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crawford has no effect on the direction of BRP Old i.e., BRP Old and Crawford go up and down completely randomly.

Pair Corralation between BRP Old and Crawford

Considering the 90-day investment horizon BRP Old is expected to under-perform the Crawford. But the stock apears to be less risky and, when comparing its historical volatility, BRP Old is 1.15 times less risky than Crawford. The stock trades about -0.03 of its potential returns per unit of risk. The Crawford Company is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  601.00  in Crawford Company on October 23, 2024 and sell it today you would earn a total of  607.00  from holding Crawford Company or generate 101.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	24.29%
Values	Daily Returns

BRP Old  vs.  Crawford Company

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.

Crawford

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Crawford Company are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent basic indicators, Crawford may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with BRP Old and Crawford

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

The idea behind BRP Old and Crawford Company 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.