Correlation Between Flow Beverage and BRP

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

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

Diversification Opportunities for Flow Beverage and BRP

0.1

Correlation Coefficient

Flow Beverage  BRP

Average diversification

The 3 months correlation between Flow and BRP is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Flow Beverage Corp and BRP Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRP Inc and Flow Beverage 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 Flow Beverage Corp 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 Inc has no effect on the direction of Flow Beverage i.e., Flow Beverage and BRP go up and down completely randomly.

Pair Corralation between Flow Beverage and BRP

Assuming the 90 days trading horizon Flow Beverage is expected to generate 20.88 times less return on investment than BRP. In addition to that, Flow Beverage is 3.78 times more volatile than BRP Inc. It trades about 0.0 of its total potential returns per unit of risk. BRP Inc is currently generating about 0.24 per unit of volatility. If you would invest  4,770  in BRP Inc on April 25, 2025 and sell it today you would earn a total of  2,274  from holding BRP Inc or generate 47.67% return on investment over 90 days.

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

Flow Beverage Corp  vs.  BRP Inc

Flow Beverage Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Flow Beverage Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Flow Beverage is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

BRP Inc

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in BRP Inc are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, BRP displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Flow Beverage and BRP

The main advantage of trading using opposite Flow Beverage and BRP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flow Beverage 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 Flow Beverage Corp and BRP Inc 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.