Correlation Between Brunswick and SNDL
Can any of the company-specific risk be diversified away by investing in both Brunswick and SNDL 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 SNDL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brunswick and SNDL Inc, you can compare the effects of market volatilities on Brunswick and SNDL 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 SNDL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brunswick and SNDL.
Diversification Opportunities for Brunswick and SNDL
Average diversification
The 3 months correlation between Brunswick and SNDL is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Brunswick and SNDL Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SNDL Inc 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 SNDL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SNDL Inc has no effect on the direction of Brunswick i.e., Brunswick and SNDL go up and down completely randomly.
Pair Corralation between Brunswick and SNDL
Allowing for the 90-day total investment horizon Brunswick is expected to generate 0.46 times more return on investment than SNDL. However, Brunswick is 2.16 times less risky than SNDL. It trades about 0.09 of its potential returns per unit of risk. SNDL Inc is currently generating about -0.05 per unit of risk. If you would invest 7,954 in Brunswick on August 25, 2024 and sell it today you would earn a total of 283.00 from holding Brunswick or generate 3.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Brunswick vs. SNDL Inc
Performance |
| Timeline |
| Brunswick |
| SNDL Inc |
Brunswick and SNDL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brunswick and SNDL
The main advantage of trading using opposite Brunswick and SNDL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brunswick position performs unexpectedly, SNDL 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 SNDL will offset losses from the drop in SNDL's long position.| Brunswick vs. MCBC Holdings | Brunswick vs. Marine Products | Brunswick vs. Winnebago Industries | Brunswick vs. LCI 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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