Correlation Between Brunner Investment and Dunedin Enterprise
Can any of the company-specific risk be diversified away by investing in both Brunner Investment and Dunedin Enterprise 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 Brunner Investment and Dunedin Enterprise into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brunner Investment Trust and Dunedin Enterprise Investment, you can compare the effects of market volatilities on Brunner Investment and Dunedin Enterprise 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 Brunner Investment with a short position of Dunedin Enterprise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brunner Investment and Dunedin Enterprise.
Diversification Opportunities for Brunner Investment and Dunedin Enterprise
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Brunner and Dunedin is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Brunner Investment Trust and Dunedin Enterprise Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunedin Enterprise and Brunner Investment 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 Brunner Investment Trust are associated (or correlated) with Dunedin Enterprise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunedin Enterprise has no effect on the direction of Brunner Investment i.e., Brunner Investment and Dunedin Enterprise go up and down completely randomly.
Pair Corralation between Brunner Investment and Dunedin Enterprise
Assuming the 90 days trading horizon Brunner Investment Trust is expected to generate 1.22 times more return on investment than Dunedin Enterprise. However, Brunner Investment is 1.22 times more volatile than Dunedin Enterprise Investment. It trades about 0.12 of its potential returns per unit of risk. Dunedin Enterprise Investment is currently generating about 0.03 per unit of risk. If you would invest 141,500 in Brunner Investment Trust on September 1, 2024 and sell it today you would earn a total of 4,500 from holding Brunner Investment Trust or generate 3.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brunner Investment Trust vs. Dunedin Enterprise Investment
Performance |
| Timeline |
| Brunner Investment Trust |
| Dunedin Enterprise |
Brunner Investment and Dunedin Enterprise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brunner Investment and Dunedin Enterprise
The main advantage of trading using opposite Brunner Investment and Dunedin Enterprise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brunner Investment position performs unexpectedly, Dunedin Enterprise 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 Dunedin Enterprise will offset losses from the drop in Dunedin Enterprise's long position.| Brunner Investment vs. Samsung Electronics Co | Brunner Investment vs. Virgin Wines UK | Brunner Investment vs. Air Products Chemicals | Brunner Investment vs. Hansa Investment |
| Dunedin Enterprise vs. Compal Electronics GDR | Dunedin Enterprise vs. GoldMining | Dunedin Enterprise vs. Thor Mining PLC | Dunedin Enterprise vs. Ecofin Global Utilities |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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