Correlation Between Brunswick and Cencora
Can any of the company-specific risk be diversified away by investing in both Brunswick and Cencora 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 and Cencora into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brunswick and Cencora, you can compare the effects of market volatilities on Brunswick and Cencora 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 with a short position of Cencora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brunswick and Cencora.
Diversification Opportunities for Brunswick and Cencora
Good diversification
The 3 months correlation between Brunswick and Cencora is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Brunswick and Cencora in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cencora and Brunswick 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 are associated (or correlated) with Cencora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cencora has no effect on the direction of Brunswick i.e., Brunswick and Cencora go up and down completely randomly.
Pair Corralation between Brunswick and Cencora
Allowing for the 90-day total investment horizon Brunswick is expected to under-perform the Cencora. In addition to that, Brunswick is 2.1 times more volatile than Cencora. It trades about -0.21 of its total potential returns per unit of risk. Cencora is currently generating about -0.32 per unit of volatility. If you would invest 24,287 in Cencora on September 19, 2024 and sell it today you would lose (1,523) from holding Cencora or give up 6.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brunswick vs. Cencora
Performance |
| Timeline |
| Brunswick |
| Cencora |
Brunswick and Cencora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brunswick and Cencora
The main advantage of trading using opposite Brunswick and Cencora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brunswick position performs unexpectedly, Cencora 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 Cencora will offset losses from the drop in Cencora's long position.| Brunswick vs. Clarus Corp | Brunswick vs. OneSpaWorld Holdings | Brunswick vs. Leatt Corp | Brunswick vs. Six Flags Entertainment |
| Cencora vs. United Parks Resorts | Cencora vs. Brunswick | Cencora vs. Academy Sports Outdoors | Cencora vs. Coursera |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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