Correlation Between U29195AE1 and Brunswick

Can any of the company-specific risk be diversified away by investing in both U29195AE1 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 U29195AE1 and Brunswick into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ENR 4375 31 MAR 29 and Brunswick, you can compare the effects of market volatilities on U29195AE1 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 U29195AE1 with a short position of Brunswick. Check out your portfolio center. Please also check ongoing floating volatility patterns of U29195AE1 and Brunswick.

Diversification Opportunities for U29195AE1 and Brunswick

-0.31

Correlation Coefficient

U29195AE1  Brunswick

Very good diversification

The 3 months correlation between U29195AE1 and Brunswick is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding ENR 4375 31 MAR 29 and Brunswick in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brunswick and U29195AE1 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 ENR 4375 31 MAR 29 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 U29195AE1 i.e., U29195AE1 and Brunswick go up and down completely randomly.

Pair Corralation between U29195AE1 and Brunswick

Assuming the 90 days trading horizon ENR 4375 31 MAR 29 is expected to generate 0.49 times more return on investment than Brunswick. However, ENR 4375 31 MAR 29 is 2.06 times less risky than Brunswick. It trades about -0.23 of its potential returns per unit of risk. Brunswick is currently generating about -0.58 per unit of risk. If you would invest  9,450  in ENR 4375 31 MAR 29 on October 10, 2024 and sell it today you would lose (120.00) from holding ENR 4375 31 MAR 29 or give up 1.27% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	38.1%
Values	Daily Returns

ENR 4375 31 MAR 29  vs.  Brunswick

ENR 4375 31

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ENR 4375 31 MAR 29 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, U29195AE1 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the 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 February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with U29195AE1 and Brunswick

The main advantage of trading using opposite U29195AE1 and Brunswick positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U29195AE1 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 ENR 4375 31 MAR 29 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .