Correlation Between BRP and Binah Capital

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

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

Diversification Opportunities for BRP and Binah Capital

0.26

Correlation Coefficient

BRP  Binah Capital

Modest diversification

The 3 months correlation between BRP and Binah is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding BRP Inc and Binah Capital Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Binah Capital Group, and BRP 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 Inc are associated (or correlated) with Binah Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Binah Capital Group, has no effect on the direction of BRP i.e., BRP and Binah Capital go up and down completely randomly.

Pair Corralation between BRP and Binah Capital

Given the investment horizon of 90 days BRP Inc is expected to under-perform the Binah Capital. But the stock apears to be less risky and, when comparing its historical volatility, BRP Inc is 4.81 times less risky than Binah Capital. The stock trades about -0.12 of its potential returns per unit of risk. The Binah Capital Group, is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  284.00  in Binah Capital Group, on September 18, 2024 and sell it today you would lose (19.00) from holding Binah Capital Group, or give up 6.69% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

BRP Inc  vs.  Binah Capital Group,

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 weak 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.

Binah Capital Group,

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Binah Capital Group, are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Binah Capital reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BRP and Binah Capital

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

The idea behind BRP Inc and Binah Capital Group, 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.