Correlation Between JBDI Holdings and Brunswick Corp

Can any of the company-specific risk be diversified away by investing in both JBDI 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 JBDI 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 JBDI Holdings Limited and Brunswick Corp, you can compare the effects of market volatilities on JBDI 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 JBDI Holdings with a short position of Brunswick Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of JBDI Holdings and Brunswick Corp.

Diversification Opportunities for JBDI Holdings and Brunswick Corp

0.63

Correlation Coefficient

JBDI Holdings  Brunswick Corp

Poor diversification

The 3 months correlation between JBDI and Brunswick is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding JBDI Holdings Limited and Brunswick Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brunswick Corp and JBDI 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 JBDI Holdings Limited 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 JBDI Holdings i.e., JBDI Holdings and Brunswick Corp go up and down completely randomly.

Pair Corralation between JBDI Holdings and Brunswick Corp

Given the investment horizon of 90 days JBDI Holdings Limited is expected to generate 5.65 times more return on investment than Brunswick Corp. However, JBDI Holdings is 5.65 times more volatile than Brunswick Corp. It trades about 0.06 of its potential returns per unit of risk. Brunswick Corp is currently generating about -0.02 per unit of risk. If you would invest  57.00  in JBDI Holdings Limited on September 27, 2024 and sell it today you would earn a total of  2.00  from holding JBDI Holdings Limited or generate 3.51% return on investment over 90 days.

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

JBDI Holdings Limited  vs.  Brunswick Corp

JBDI Holdings Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JBDI Holdings Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

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 JBDI Holdings and Brunswick Corp

The main advantage of trading using opposite JBDI Holdings and Brunswick Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JBDI 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 JBDI Holdings Limited 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.