Correlation Between Arthur J and Brp

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

By analyzing existing cross correlation between Arthur J Gallagher and Brp Group, you can compare the effects of market volatilities on Arthur J 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 Arthur J with a short position of Brp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arthur J and Brp.

Diversification Opportunities for Arthur J and Brp

0.28

Correlation Coefficient

Arthur J  Brp

Modest diversification

The 3 months correlation between Arthur and Brp is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Arthur J Gallagher and Brp Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brp Group and Arthur J 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 Arthur J Gallagher 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 Group has no effect on the direction of Arthur J i.e., Arthur J and Brp go up and down completely randomly.

Pair Corralation between Arthur J and Brp

If you would invest  28,081  in Arthur J Gallagher on September 29, 2024 and sell it today you would earn a total of  573.00  from holding Arthur J Gallagher or generate 2.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.59%
Values	Daily Returns

Arthur J Gallagher  vs.  Brp Group

Arthur J Gallagher

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Arthur J Gallagher are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable forward-looking indicators, Arthur J is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Brp Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brp Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Brp is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Arthur J and Brp

The main advantage of trading using opposite Arthur J and Brp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arthur J 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 Arthur J Gallagher and Brp Group 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.