Correlation Between Brunswick and Under Armour
Can any of the company-specific risk be diversified away by investing in both Brunswick and Under Armour 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 Under Armour into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brunswick and Under Armour C, you can compare the effects of market volatilities on Brunswick and Under Armour 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 Under Armour. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brunswick and Under Armour.
Diversification Opportunities for Brunswick and Under Armour
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Brunswick and Under is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Brunswick and Under Armour C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Under Armour C 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 Under Armour. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Under Armour C has no effect on the direction of Brunswick i.e., Brunswick and Under Armour go up and down completely randomly.
Pair Corralation between Brunswick and Under Armour
Allowing for the 90-day total investment horizon Brunswick is expected to under-perform the Under Armour. But the stock apears to be less risky and, when comparing its historical volatility, Brunswick is 1.77 times less risky than Under Armour. The stock trades about -0.76 of its potential returns per unit of risk. The Under Armour C is currently generating about -0.22 of returns per unit of risk over similar time horizon. If you would invest 891.00 in Under Armour C on September 25, 2024 and sell it today you would lose (113.00) from holding Under Armour C or give up 12.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brunswick vs. Under Armour C
Performance |
| Timeline |
| Brunswick |
| Under Armour C |
Brunswick and Under Armour Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brunswick and Under Armour
The main advantage of trading using opposite Brunswick and Under Armour positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brunswick position performs unexpectedly, Under Armour 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 Under Armour will offset losses from the drop in Under Armour's long position.| Brunswick vs. Amer Sports, | Brunswick vs. Ralph Lauren Corp | Brunswick vs. Under Armour C | Brunswick vs. Dogness International Corp |
| Under Armour vs. Amer Sports, | Under Armour vs. Brunswick | Under Armour vs. BRP Inc | Under Armour vs. Vision Marine Technologies |
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 Positions Ratings module to 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.
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