Correlation Between BRP and Academy Sports

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

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

Diversification Opportunities for BRP and Academy Sports

0.74

Correlation Coefficient

BRP  Academy Sports

Poor diversification

The 3 months correlation between BRP and Academy is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding BRP Inc and Academy Sports Outdoors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Academy Sports Outdoors 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 Academy Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Academy Sports Outdoors has no effect on the direction of BRP i.e., BRP and Academy Sports go up and down completely randomly.

Pair Corralation between BRP and Academy Sports

Given the investment horizon of 90 days BRP Inc is expected to generate 0.86 times more return on investment than Academy Sports. However, BRP Inc is 1.16 times less risky than Academy Sports. It trades about 0.22 of its potential returns per unit of risk. Academy Sports Outdoors is currently generating about 0.15 per unit of risk. If you would invest  3,452  in BRP Inc on May 7, 2025 and sell it today you would earn a total of  1,572  from holding BRP Inc or generate 45.54% return on investment over 90 days.

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

BRP Inc  vs.  Academy Sports Outdoors

BRP Inc

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in BRP Inc are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, BRP displayed solid returns over the last few months and may actually be approaching a breakup point.

Academy Sports Outdoors

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Academy Sports Outdoors are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Academy Sports displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BRP and Academy Sports

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

The idea behind BRP Inc and Academy Sports Outdoors 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.