Correlation Between Brunswick and Global E

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Can any of the company-specific risk be diversified away by investing in both Brunswick and Global E 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 Global E into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brunswick and Global E Online, you can compare the effects of market volatilities on Brunswick and Global E 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 Global E. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brunswick and Global E.

Diversification Opportunities for Brunswick and Global E

BrunswickGlobalDiversified AwayBrunswickGlobalDiversified Away100%
-0.51
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Brunswick and Global is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Brunswick and Global E Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global E Online 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 Global E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global E Online has no effect on the direction of Brunswick i.e., Brunswick and Global E go up and down completely randomly.

Pair Corralation between Brunswick and Global E

Allowing for the 90-day total investment horizon Brunswick is expected to under-perform the Global E. But the stock apears to be less risky and, when comparing its historical volatility, Brunswick is 2.01 times less risky than Global E. The stock trades about -0.27 of its potential returns per unit of risk. The Global E Online is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  5,166  in Global E Online on November 26, 2024 and sell it today you would lose (562.00) from holding Global E Online or give up 10.88% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Brunswick  vs.  Global E Online

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -20-1001020304050
JavaScript chart by amCharts 3.21.15BC GLBE
       Timeline  
Brunswick 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
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 March 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb6570758085
Global E Online 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Global E Online has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's fundamental drivers remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb45505560

Brunswick and Global E Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.13-2.34-1.56-0.770.00.631.271.912.55 0.040.060.080.100.12
JavaScript chart by amCharts 3.21.15BC GLBE
       Returns  

Pair Trading with Brunswick and Global E

The main advantage of trading using opposite Brunswick and Global E positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brunswick position performs unexpectedly, Global E 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 Global E will offset losses from the drop in Global E's long position.
The idea behind Brunswick and Global E Online 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.

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