Correlation Between Brunswick Corp and Creative Global

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

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

Diversification Opportunities for Brunswick Corp and Creative Global

-0.19

Correlation Coefficient

Brunswick Corp  Creative Global

Good diversification

The 3 months correlation between Brunswick and Creative is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Brunswick Corp and Creative Global Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Creative Global Tech and Brunswick Corp 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 Brunswick Corp are associated (or correlated) with Creative Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Creative Global Tech has no effect on the direction of Brunswick Corp i.e., Brunswick Corp and Creative Global go up and down completely randomly.

Pair Corralation between Brunswick Corp and Creative Global

Assuming the 90 days horizon Brunswick Corp is expected to generate 0.14 times more return on investment than Creative Global. However, Brunswick Corp is 7.34 times less risky than Creative Global. It trades about -0.03 of its potential returns per unit of risk. Creative Global Technology is currently generating about -0.36 per unit of risk. If you would invest  2,424  in Brunswick Corp on October 15, 2024 and sell it today you would lose (13.00) from holding Brunswick Corp or give up 0.54% of portfolio value over 90 days.

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

Brunswick Corp  vs.  Creative Global Technology

Brunswick Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brunswick Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Brunswick Corp is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Creative Global Tech

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Creative Global Technology are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain basic indicators, Creative Global disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Brunswick Corp and Creative Global

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

The idea behind Brunswick Corp and Creative Global Technology 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.