Correlation Between BRP and Delphi Technologies

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

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

Diversification Opportunities for BRP and Delphi Technologies

0.0

Correlation Coefficient

BRP  Delphi Technologies

Pay attention - limited upside

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

Pair Corralation between BRP and Delphi Technologies

If you would invest (100.00) in Delphi Technologies PLC on February 21, 2024 and sell it today you would earn a total of  100.00  from holding Delphi Technologies PLC or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

BRP Inc  vs.  Delphi Technologies PLC

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 very healthy basic indicators, BRP is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Delphi Technologies PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Delphi Technologies PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Delphi Technologies is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with BRP and Delphi Technologies

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

The idea behind BRP Inc and Delphi Technologies PLC 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.