Correlation Between ESH Acquisition and Brunswick
Can any of the company-specific risk be diversified away by investing in both ESH Acquisition and Brunswick 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 ESH Acquisition and Brunswick into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ESH Acquisition Corp and Brunswick, you can compare the effects of market volatilities on ESH Acquisition and Brunswick 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 ESH Acquisition with a short position of Brunswick. Check out your portfolio center. Please also check ongoing floating volatility patterns of ESH Acquisition and Brunswick.
Diversification Opportunities for ESH Acquisition and Brunswick
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ESH and Brunswick is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding ESH Acquisition Corp and Brunswick in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brunswick and ESH Acquisition 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 ESH Acquisition Corp are associated (or correlated) with Brunswick. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brunswick has no effect on the direction of ESH Acquisition i.e., ESH Acquisition and Brunswick go up and down completely randomly.
Pair Corralation between ESH Acquisition and Brunswick
Given the investment horizon of 90 days ESH Acquisition Corp is expected to generate 0.61 times more return on investment than Brunswick. However, ESH Acquisition Corp is 1.65 times less risky than Brunswick. It trades about 0.02 of its potential returns per unit of risk. Brunswick is currently generating about -0.03 per unit of risk. If you would invest 1,055 in ESH Acquisition Corp on November 3, 2024 and sell it today you would earn a total of 22.00 from holding ESH Acquisition Corp or generate 2.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ESH Acquisition Corp vs. Brunswick
Performance |
| Timeline |
| ESH Acquisition Corp |
| Brunswick |
ESH Acquisition and Brunswick Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ESH Acquisition and Brunswick
The main advantage of trading using opposite ESH Acquisition and Brunswick positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ESH Acquisition position performs unexpectedly, Brunswick 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 Brunswick will offset losses from the drop in Brunswick's long position.| ESH Acquisition vs. Wabash National | ESH Acquisition vs. Plexus Corp | ESH Acquisition vs. Sonos Inc | ESH Acquisition vs. Visteon Corp |
| 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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