Correlation Between Brunello Cucinelli and Prada SpA

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

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

Diversification Opportunities for Brunello Cucinelli and Prada SpA

0.51

Correlation Coefficient

Brunello Cucinelli  Prada SpA

Very weak diversification

The 3 months correlation between Brunello and Prada is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Brunello Cucinelli SpA and Prada SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prada SpA and Brunello Cucinelli 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 Brunello Cucinelli SpA are associated (or correlated) with Prada SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prada SpA has no effect on the direction of Brunello Cucinelli i.e., Brunello Cucinelli and Prada SpA go up and down completely randomly.

Pair Corralation between Brunello Cucinelli and Prada SpA

Assuming the 90 days horizon Brunello Cucinelli SpA is expected to generate 0.72 times more return on investment than Prada SpA. However, Brunello Cucinelli SpA is 1.38 times less risky than Prada SpA. It trades about 0.05 of its potential returns per unit of risk. Prada SpA is currently generating about -0.02 per unit of risk. If you would invest  1,094  in Brunello Cucinelli SpA on December 30, 2024 and sell it today you would earn a total of  60.00  from holding Brunello Cucinelli SpA or generate 5.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Brunello Cucinelli SpA  vs.  Prada SpA

Brunello Cucinelli SpA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Brunello Cucinelli SpA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile fundamental indicators, Brunello Cucinelli may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Prada SpA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Prada SpA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Prada SpA is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Brunello Cucinelli and Prada SpA

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

The idea behind Brunello Cucinelli SpA and Prada SpA 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.