Correlation Between Crawford and BRP Old

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

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

Diversification Opportunities for Crawford and BRP Old

-0.13

Correlation Coefficient

Crawford  BRP Old

Good diversification

The 3 months correlation between Crawford and BRP is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Crawford Company and BRP Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRP Old and Crawford 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 Crawford Company are associated (or correlated) with BRP Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRP Old has no effect on the direction of Crawford i.e., Crawford and BRP Old go up and down completely randomly.

Pair Corralation between Crawford and BRP Old

If you would invest  1,131  in Crawford Company on October 8, 2024 and sell it today you would earn a total of  6.00  from holding Crawford Company or generate 0.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	5.26%
Values	Daily Returns

Crawford Company  vs.  BRP Old

Crawford

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Crawford Company are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Crawford is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

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.

Pair Trading with Crawford and BRP Old

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

The idea behind Crawford Company and BRP Old 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.