Correlation Between ChargePoint Holdings and Brunswick Corp

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

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

Diversification Opportunities for ChargePoint Holdings and Brunswick Corp

0.63

Correlation Coefficient

ChargePoint Holdings  Brunswick Corp

Poor diversification

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

Pair Corralation between ChargePoint Holdings and Brunswick Corp

Given the investment horizon of 90 days ChargePoint Holdings is expected to generate 6.49 times more return on investment than Brunswick Corp. However, ChargePoint Holdings is 6.49 times more volatile than Brunswick Corp. It trades about 0.03 of its potential returns per unit of risk. Brunswick Corp is currently generating about -0.02 per unit of risk. If you would invest  115.00  in ChargePoint Holdings on September 27, 2024 and sell it today you would earn a total of  1.00  from holding ChargePoint Holdings or generate 0.87% return on investment over 90 days.

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

ChargePoint Holdings  vs.  Brunswick Corp

ChargePoint Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ChargePoint Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Brunswick Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brunswick Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Brunswick Corp is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ChargePoint Holdings and Brunswick Corp

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

The idea behind ChargePoint Holdings and Brunswick Corp 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..