Correlation Between Canada Goose and Brunswick

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

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

Diversification Opportunities for Canada Goose and Brunswick

0.24

Correlation Coefficient

Canada Goose  Brunswick

Modest diversification

The 3 months correlation between Canada and Brunswick is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Canada Goose Holdings and Brunswick in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brunswick and Canada Goose 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 Canada Goose Holdings are associated (or correlated) with Brunswick. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brunswick has no effect on the direction of Canada Goose i.e., Canada Goose and Brunswick go up and down completely randomly.

Pair Corralation between Canada Goose and Brunswick

Given the investment horizon of 90 days Canada Goose Holdings is expected to under-perform the Brunswick. In addition to that, Canada Goose is 1.43 times more volatile than Brunswick. It trades about -0.03 of its total potential returns per unit of risk. Brunswick is currently generating about 0.0 per unit of volatility. If you would invest  7,397  in Brunswick on September 28, 2024 and sell it today you would lose (927.50) from holding Brunswick or give up 12.54% of portfolio value over 90 days.

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

Canada Goose Holdings  vs.  Brunswick

Canada Goose Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Canada Goose Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

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 uncertain performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Canada Goose and Brunswick

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

The idea behind Canada Goose Holdings and Brunswick 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.