Correlation Between Brunswick and XIAO I

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

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

Diversification Opportunities for Brunswick and XIAO I

0.05

Correlation Coefficient

Brunswick  XIAO I

Significant diversification

The 3 months correlation between Brunswick and XIAO is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Brunswick and XIAO I American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XIAO I American and Brunswick 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 are associated (or correlated) with XIAO I. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XIAO I American has no effect on the direction of Brunswick i.e., Brunswick and XIAO I go up and down completely randomly.

Pair Corralation between Brunswick and XIAO I

Allowing for the 90-day total investment horizon Brunswick is expected to under-perform the XIAO I. But the stock apears to be less risky and, when comparing its historical volatility, Brunswick is 4.41 times less risky than XIAO I. The stock trades about -0.05 of its potential returns per unit of risk. The XIAO I American is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  613.00  in XIAO I American on October 10, 2024 and sell it today you would lose (57.00) from holding XIAO I American or give up 9.3% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.2%
Values	Daily Returns

Brunswick  vs.  XIAO I American

Brunswick

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brunswick has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

XIAO I American

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in XIAO I American are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, XIAO I demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Brunswick and XIAO I

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

The idea behind Brunswick and XIAO I American 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.