Correlation Between Hurco Companies and BRP

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

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

Diversification Opportunities for Hurco Companies and BRP

-0.52

Correlation Coefficient

Hurco Companies  BRP

Excellent diversification

The 3 months correlation between Hurco and BRP is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Hurco Companies and BRP Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRP Inc and Hurco Companies 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 Hurco Companies 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 Hurco Companies i.e., Hurco Companies and BRP go up and down completely randomly.

Pair Corralation between Hurco Companies and BRP

Given the investment horizon of 90 days Hurco Companies is expected to generate 1.05 times more return on investment than BRP. However, Hurco Companies is 1.05 times more volatile than BRP Inc. It trades about -0.01 of its potential returns per unit of risk. BRP Inc is currently generating about -0.02 per unit of risk. If you would invest  2,543  in Hurco Companies on September 24, 2024 and sell it today you would lose (623.00) from holding Hurco Companies or give up 24.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

Hurco Companies  vs.  BRP Inc

Hurco Companies

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hurco Companies are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Hurco Companies may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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 uncertain 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 Hurco Companies and BRP

The main advantage of trading using opposite Hurco Companies and BRP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hurco Companies 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 Hurco Companies 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.