Correlation Between Brp and Erie Indemnity

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

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

Diversification Opportunities for Brp and Erie Indemnity

0.0

Correlation Coefficient

Brp  Erie Indemnity

Pay attention - limited upside

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

Pair Corralation between Brp and Erie Indemnity

If you would invest  0.00  in Brp Group on May 7, 2025 and sell it today you would earn a total of  0.00  from holding Brp Group or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.61%
Values	Daily Returns

Brp Group  vs.  Erie Indemnity

Brp Group

Risk-Adjusted Performance

Weakest

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.

Erie Indemnity

Risk-Adjusted Performance

Weakest

Over the last 90 days Erie Indemnity has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward indicators, Erie Indemnity is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Brp and Erie Indemnity

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

The idea behind Brp Group and Erie Indemnity 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 Stocks Directory module to find actively traded stocks across global markets.