Correlation Between Mayfair Gold and BRP

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

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

Diversification Opportunities for Mayfair Gold and BRP

-0.14

Correlation Coefficient

Mayfair Gold  BRP

Good diversification

The 3 months correlation between Mayfair and BRP is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Mayfair Gold Corp and BRP Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRP Inc and Mayfair Gold 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 Mayfair Gold 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 Mayfair Gold i.e., Mayfair Gold and BRP go up and down completely randomly.

Pair Corralation between Mayfair Gold and BRP

Assuming the 90 days horizon Mayfair Gold Corp is expected to under-perform the BRP. But the otc stock apears to be less risky and, when comparing its historical volatility, Mayfair Gold Corp is 2.09 times less risky than BRP. The otc stock trades about -0.26 of its potential returns per unit of risk. The BRP Inc is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  4,819  in BRP Inc on September 17, 2024 and sell it today you would earn a total of  352.00  from holding BRP Inc or generate 7.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Mayfair Gold Corp  vs.  BRP Inc

Mayfair Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

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.

Pair Trading with Mayfair Gold and BRP

The main advantage of trading using opposite Mayfair Gold and BRP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mayfair Gold 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 Mayfair Gold 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 CEOs Directory module to screen CEOs from public companies around the world.