Correlation Between BRP and Arcimoto

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

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

Diversification Opportunities for BRP and Arcimoto

-0.16

Correlation Coefficient

BRP  Arcimoto

Good diversification

The 3 months correlation between BRP and Arcimoto is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding BRP Inc and Arcimoto in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arcimoto 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 Arcimoto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arcimoto has no effect on the direction of BRP i.e., BRP and Arcimoto go up and down completely randomly.

Pair Corralation between BRP and Arcimoto

Given the investment horizon of 90 days BRP Inc is expected to generate 0.91 times more return on investment than Arcimoto. However, BRP Inc is 1.1 times less risky than Arcimoto. It trades about 0.24 of its potential returns per unit of risk. Arcimoto is currently generating about -0.19 per unit of risk. If you would invest  6,109  in BRP Inc on January 25, 2024 and sell it today you would earn a total of  896.00  from holding BRP Inc or generate 14.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

BRP Inc  vs.  Arcimoto

BRP Inc

Risk-Adjusted Performance

4 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BRP Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, BRP may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Arcimoto

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Arcimoto has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in May 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with BRP and Arcimoto

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

The idea behind BRP Inc and Arcimoto 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.