Correlation Between Brunswick and United Parks
Can any of the company-specific risk be diversified away by investing in both Brunswick and United Parks 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 United Parks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brunswick and United Parks Resorts, you can compare the effects of market volatilities on Brunswick and United Parks 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 United Parks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brunswick and United Parks.
Diversification Opportunities for Brunswick and United Parks
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Brunswick and United is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Brunswick and United Parks Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Parks Resorts 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 United Parks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Parks Resorts has no effect on the direction of Brunswick i.e., Brunswick and United Parks go up and down completely randomly.
Pair Corralation between Brunswick and United Parks
Allowing for the 90-day total investment horizon Brunswick is expected to generate 1.11 times more return on investment than United Parks. However, Brunswick is 1.11 times more volatile than United Parks Resorts. It trades about 0.18 of its potential returns per unit of risk. United Parks Resorts is currently generating about -0.26 per unit of risk. If you would invest 6,374 in Brunswick on November 3, 2024 and sell it today you would earn a total of 419.00 from holding Brunswick or generate 6.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brunswick vs. United Parks Resorts
Performance |
| Timeline |
| Brunswick |
| United Parks Resorts |
Brunswick and United Parks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brunswick and United Parks
The main advantage of trading using opposite Brunswick and United Parks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brunswick position performs unexpectedly, United Parks 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 United Parks will offset losses from the drop in United Parks' long position.| Brunswick vs. MCBC Holdings | Brunswick vs. Marine Products | Brunswick vs. Winnebago Industries | Brunswick vs. LCI Industries |
| United Parks vs. Lithium Americas Corp | United Parks vs. Perseus Mining Limited | United Parks vs. ioneer Ltd American | United Parks vs. 51Talk Online Education |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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