Correlation Between BRP and Nebius Group

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

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

Diversification Opportunities for BRP and Nebius Group

-0.36

Correlation Coefficient

BRP  Nebius Group

Very good diversification

The 3 months correlation between BRP and Nebius is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding BRP Inc and Nebius Group NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nebius Group NV 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 Nebius Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nebius Group NV has no effect on the direction of BRP i.e., BRP and Nebius Group go up and down completely randomly.

Pair Corralation between BRP and Nebius Group

Given the investment horizon of 90 days BRP Inc is expected to under-perform the Nebius Group. But the stock apears to be less risky and, when comparing its historical volatility, BRP Inc is 2.87 times less risky than Nebius Group. The stock trades about -0.11 of its potential returns per unit of risk. The Nebius Group NV is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  1,894  in Nebius Group NV on September 13, 2024 and sell it today you would earn a total of  1,276  from holding Nebius Group NV or generate 67.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

BRP Inc  vs.  Nebius Group NV

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.

Nebius Group NV

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nebius Group NV are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady forward indicators, Nebius Group unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BRP and Nebius Group

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

The idea behind BRP Inc and Nebius Group 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.

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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.