Correlation Between Lanvin Group and Brunswick

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

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

Diversification Opportunities for Lanvin Group and Brunswick

-0.81

Correlation Coefficient

Lanvin Group  Brunswick

Pay attention - limited upside

The 3 months correlation between Lanvin and Brunswick is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Lanvin Group Holdings and Brunswick in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brunswick and Lanvin Group 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 Lanvin Group 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 Lanvin Group i.e., Lanvin Group and Brunswick go up and down completely randomly.

Pair Corralation between Lanvin Group and Brunswick

Given the investment horizon of 90 days Lanvin Group Holdings is expected to under-perform the Brunswick. In addition to that, Lanvin Group is 2.63 times more volatile than Brunswick. It trades about -0.01 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 (798.00) from holding Brunswick or give up 10.79% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	99.8%
Values	Daily Returns

Lanvin Group Holdings  vs.  Brunswick

Lanvin Group Holdings

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Lanvin Group Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, Lanvin Group showed solid returns over the last few months and may actually be approaching a breakup point.

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 Lanvin Group and Brunswick

The main advantage of trading using opposite Lanvin Group and Brunswick positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lanvin Group 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 Lanvin Group 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.

Check out your portfolio center.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.