Correlation Between Brunswick Corp and ChargePoint Holdings

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

By analyzing existing cross correlation between Brunswick Corp and ChargePoint Holdings, you can compare the effects of market volatilities on Brunswick Corp and ChargePoint Holdings 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 ChargePoint Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brunswick Corp and ChargePoint Holdings.

Diversification Opportunities for Brunswick Corp and ChargePoint Holdings

0.76

Correlation Coefficient

Brunswick Corp  ChargePoint Holdings

Poor diversification

The 3 months correlation between Brunswick and ChargePoint is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Brunswick Corp and ChargePoint Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChargePoint Holdings 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 ChargePoint Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChargePoint Holdings has no effect on the direction of Brunswick Corp i.e., Brunswick Corp and ChargePoint Holdings go up and down completely randomly.

Pair Corralation between Brunswick Corp and ChargePoint Holdings

Assuming the 90 days horizon Brunswick Corp is expected to under-perform the ChargePoint Holdings. But the preferred stock apears to be less risky and, when comparing its historical volatility, Brunswick Corp is 7.65 times less risky than ChargePoint Holdings. The preferred stock trades about -0.05 of its potential returns per unit of risk. The ChargePoint Holdings is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  115.00  in ChargePoint Holdings on September 27, 2024 and sell it today you would earn a total of  1.00  from holding ChargePoint Holdings or generate 0.87% return on investment over 90 days.

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

Brunswick Corp  vs.  ChargePoint Holdings

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. In spite of rather sound basic indicators, Brunswick Corp is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

ChargePoint Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ChargePoint Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Brunswick Corp and ChargePoint Holdings

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

The idea behind Brunswick Corp and ChargePoint Holdings 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..