Correlation Between Brunswick Corp and Zhihu
Can any of the company-specific risk be diversified away by investing in both Brunswick Corp and Zhihu 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 Zhihu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brunswick Corp and Zhihu Inc ADR, you can compare the effects of market volatilities on Brunswick Corp and Zhihu 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 Zhihu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brunswick Corp and Zhihu.
Diversification Opportunities for Brunswick Corp and Zhihu
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Brunswick and Zhihu is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Brunswick Corp and Zhihu Inc ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhihu Inc ADR 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 Zhihu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhihu Inc ADR has no effect on the direction of Brunswick Corp i.e., Brunswick Corp and Zhihu go up and down completely randomly.
Pair Corralation between Brunswick Corp and Zhihu
Assuming the 90 days horizon Brunswick Corp is expected to under-perform the Zhihu. But the preferred stock apears to be less risky and, when comparing its historical volatility, Brunswick Corp is 5.75 times less risky than Zhihu. The preferred stock trades about -0.14 of its potential returns per unit of risk. The Zhihu Inc ADR is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 369.00 in Zhihu Inc ADR on August 28, 2024 and sell it today you would lose (1.00) from holding Zhihu Inc ADR or give up 0.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Brunswick Corp vs. Zhihu Inc ADR
Performance |
| Timeline |
| Brunswick Corp |
| Zhihu Inc ADR |
Brunswick Corp and Zhihu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brunswick Corp and Zhihu
The main advantage of trading using opposite Brunswick Corp and Zhihu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brunswick Corp position performs unexpectedly, Zhihu 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 Zhihu will offset losses from the drop in Zhihu's long position.| Brunswick Corp vs. Zhihu Inc ADR | Brunswick Corp vs. Playstudios | Brunswick Corp vs. GameStop Corp | Brunswick Corp vs. KVH Industries |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |