Correlation Between Brunswick Corp and Canoo Holdings
Can any of the company-specific risk be diversified away by investing in both Brunswick Corp and Canoo Holdings 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 Brunswick Corp and Canoo Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brunswick Corp and Canoo Holdings, you can compare the effects of market volatilities on Brunswick Corp and Canoo Holdings 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 Brunswick Corp with a short position of Canoo Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brunswick Corp and Canoo Holdings.
Diversification Opportunities for Brunswick Corp and Canoo Holdings
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Brunswick and Canoo is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Brunswick Corp and Canoo Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canoo Holdings and Brunswick Corp 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 Brunswick Corp are associated (or correlated) with Canoo Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canoo Holdings has no effect on the direction of Brunswick Corp i.e., Brunswick Corp and Canoo Holdings go up and down completely randomly.
Pair Corralation between Brunswick Corp and Canoo Holdings
Assuming the 90 days horizon Brunswick Corp is expected to generate 0.1 times more return on investment than Canoo Holdings. However, Brunswick Corp is 10.08 times less risky than Canoo Holdings. It trades about 0.02 of its potential returns per unit of risk. Canoo Holdings is currently generating about -0.01 per unit of risk. If you would invest 2,234 in Brunswick Corp on August 27, 2024 and sell it today you would earn a total of 191.00 from holding Brunswick Corp or generate 8.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brunswick Corp vs. Canoo Holdings
Performance |
| Timeline |
| Brunswick Corp |
| Canoo Holdings |
Brunswick Corp and Canoo Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brunswick Corp and Canoo Holdings
The main advantage of trading using opposite Brunswick Corp and Canoo Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brunswick Corp position performs unexpectedly, Canoo Holdings 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 Canoo Holdings will offset losses from the drop in Canoo Holdings' long position.The idea behind Brunswick Corp and Canoo Holdings 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.| Canoo Holdings vs. EVgo Equity Warrants | Canoo Holdings vs. Canoo Inc | Canoo Holdings vs. Paysafe Ltd Wt |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |