Correlation Between St Elmo and BRP

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Can any of the company-specific risk be diversified away by investing in both St Elmo 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 St Elmo and BRP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between St Elmo Silver and BRP Inc, you can compare the effects of market volatilities on St Elmo 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 St Elmo with a short position of BRP. Check out your portfolio center. Please also check ongoing floating volatility patterns of St Elmo and BRP.

Diversification Opportunities for St Elmo and BRP

STLMBRPDiversified AwaySTLMBRPDiversified Away100%
0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between STLM and BRP is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding St Elmo Silver and BRP Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRP Inc and St Elmo 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 St Elmo Silver 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 St Elmo i.e., St Elmo and BRP go up and down completely randomly.

Pair Corralation between St Elmo and BRP

If you would invest  0.00  in St Elmo Silver on November 22, 2024 and sell it today you would earn a total of  0.00  from holding St Elmo Silver or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy1.72%
ValuesDaily Returns

St Elmo Silver  vs.  BRP Inc

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -10-50510
JavaScript chart by amCharts 3.21.15STLM DOOO
       Timeline  
St Elmo Silver 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days St Elmo Silver has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, St Elmo 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

Very Weak

 
Weak
 
Strong
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 weak 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.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb4244464850525456

St Elmo and BRP Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15 0.010.020.030.040.050.06
JavaScript chart by amCharts 3.21.15STLM DOOO
       Returns  

Pair Trading with St Elmo and BRP

The main advantage of trading using opposite St Elmo and BRP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if St Elmo 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 St Elmo Silver 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.

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