Correlation Between Brunswick and Estrella Immunopharma

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

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

Diversification Opportunities for Brunswick and Estrella Immunopharma

-0.13

Correlation Coefficient

Brunswick  Estrella Immunopharma

Good diversification

The 3 months correlation between Brunswick and Estrella is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Brunswick and Estrella Immunopharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Estrella Immunopharma 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 Estrella Immunopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Estrella Immunopharma has no effect on the direction of Brunswick i.e., Brunswick and Estrella Immunopharma go up and down completely randomly.

Pair Corralation between Brunswick and Estrella Immunopharma

Allowing for the 90-day total investment horizon Brunswick is expected to under-perform the Estrella Immunopharma. But the stock apears to be less risky and, when comparing its historical volatility, Brunswick is 18.3 times less risky than Estrella Immunopharma. The stock trades about -0.03 of its potential returns per unit of risk. The Estrella Immunopharma is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  6.06  in Estrella Immunopharma on September 13, 2024 and sell it today you would earn a total of  2.94  from holding Estrella Immunopharma or generate 48.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	34.38%
Values	Daily Returns

Brunswick  vs.  Estrella Immunopharma

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 rather sound fundamental indicators, Brunswick is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Estrella Immunopharma

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Estrella Immunopharma are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Estrella Immunopharma showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Brunswick and Estrella Immunopharma

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

The idea behind Brunswick and Estrella Immunopharma 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.