Correlation Between ECN Capital and BRP

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

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

Diversification Opportunities for ECN Capital and BRP

0.0

Correlation Coefficient

ECN Capital  BRP

Pay attention - limited upside

The 3 months correlation between ECN and BRP is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ECN Capital Corp and BRP Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRP Inc and ECN Capital 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 ECN Capital Corp are associated (or correlated) with BRP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRP Inc has no effect on the direction of ECN Capital i.e., ECN Capital and BRP go up and down completely randomly.

Pair Corralation between ECN Capital and BRP

If you would invest  6,799  in BRP Inc on October 5, 2024 and sell it today you would earn a total of  577.00  from holding BRP Inc or generate 8.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	5.0%
Values	Daily Returns

ECN Capital Corp  vs.  BRP Inc

ECN Capital Corp

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days ECN Capital Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, ECN Capital is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

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 latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with ECN Capital and BRP

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

The idea behind ECN Capital Corp and BRP Inc 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.