Correlation Between Bruker and Penumbra

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

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

Diversification Opportunities for Bruker and Penumbra

-0.63

Correlation Coefficient

Bruker  Penumbra

Excellent diversification

The 3 months correlation between Bruker and Penumbra is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Bruker and Penumbra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penumbra and Bruker 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 Bruker are associated (or correlated) with Penumbra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penumbra has no effect on the direction of Bruker i.e., Bruker and Penumbra go up and down completely randomly.

Pair Corralation between Bruker and Penumbra

Given the investment horizon of 90 days Bruker is expected to under-perform the Penumbra. But the stock apears to be less risky and, when comparing its historical volatility, Bruker is 1.01 times less risky than Penumbra. The stock trades about -0.19 of its potential returns per unit of risk. The Penumbra is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  23,818  in Penumbra on December 29, 2024 and sell it today you would earn a total of  3,144  from holding Penumbra or generate 13.2% return on investment over 90 days.

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

Bruker  vs.  Penumbra

Bruker

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bruker has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's forward-looking signals remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Penumbra

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Penumbra are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Penumbra displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bruker and Penumbra

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

The idea behind Bruker and Penumbra 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.