Correlation Between BRP and NuRAN Wireless

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

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

Diversification Opportunities for BRP and NuRAN Wireless

-0.06

Correlation Coefficient

BRP  NuRAN Wireless

Good diversification

The 3 months correlation between BRP and NuRAN is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding BRP Inc and NuRAN Wireless in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NuRAN Wireless 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 NuRAN Wireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NuRAN Wireless has no effect on the direction of BRP i.e., BRP and NuRAN Wireless go up and down completely randomly.

Pair Corralation between BRP and NuRAN Wireless

Given the investment horizon of 90 days BRP Inc is expected to generate 0.61 times more return on investment than NuRAN Wireless. However, BRP Inc is 1.65 times less risky than NuRAN Wireless. It trades about -0.21 of its potential returns per unit of risk. NuRAN Wireless is currently generating about -0.14 per unit of risk. If you would invest  4,111  in BRP Inc on December 24, 2024 and sell it today you would lose (446.00) from holding BRP Inc or give up 10.85% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

BRP Inc  vs.  NuRAN Wireless

BRP Inc

Risk-Adjusted Performance

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 April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

NuRAN Wireless

Risk-Adjusted Performance

Very Weak

Over the last 90 days NuRAN Wireless has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, NuRAN Wireless is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with BRP and NuRAN Wireless

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

The idea behind BRP Inc and NuRAN Wireless 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.