Correlation Between Brunswick and Cirmaker Technology

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Can any of the company-specific risk be diversified away by investing in both Brunswick and Cirmaker Technology 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 Cirmaker Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brunswick and Cirmaker Technology, you can compare the effects of market volatilities on Brunswick and Cirmaker Technology 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 Cirmaker Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brunswick and Cirmaker Technology.

Diversification Opportunities for Brunswick and Cirmaker Technology

0.04
  Correlation Coefficient

Significant diversification

The 3 months correlation between Brunswick and Cirmaker is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Brunswick and Cirmaker Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cirmaker Technology 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 Cirmaker Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cirmaker Technology has no effect on the direction of Brunswick i.e., Brunswick and Cirmaker Technology go up and down completely randomly.

Pair Corralation between Brunswick and Cirmaker Technology

Allowing for the 90-day total investment horizon Brunswick is expected to under-perform the Cirmaker Technology. But the stock apears to be less risky and, when comparing its historical volatility, Brunswick is 31.23 times less risky than Cirmaker Technology. The stock trades about -0.04 of its potential returns per unit of risk. The Cirmaker Technology is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  0.01  in Cirmaker Technology on October 9, 2024 and sell it today you would earn a total of  5.39  from holding Cirmaker Technology or generate 53900.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Brunswick  vs.  Cirmaker Technology

 Performance 
       Timeline  
Brunswick 

Risk-Adjusted Performance

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Strong
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.
Cirmaker Technology 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Cirmaker Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward-looking signals, Cirmaker Technology is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Brunswick and Cirmaker Technology Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Brunswick and Cirmaker Technology

The main advantage of trading using opposite Brunswick and Cirmaker Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brunswick position performs unexpectedly, Cirmaker Technology 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 Cirmaker Technology will offset losses from the drop in Cirmaker Technology's long position.
The idea behind Brunswick and Cirmaker 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.
Check out your portfolio center.
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.

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