Correlation Between Fenbo Holdings and Brunswick
Can any of the company-specific risk be diversified away by investing in both Fenbo Holdings 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 Fenbo Holdings and Brunswick into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fenbo Holdings Limited and Brunswick, you can compare the effects of market volatilities on Fenbo Holdings 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 Fenbo Holdings with a short position of Brunswick. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fenbo Holdings and Brunswick.
Diversification Opportunities for Fenbo Holdings and Brunswick
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fenbo and Brunswick is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Fenbo Holdings Limited and Brunswick in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brunswick and Fenbo Holdings 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 Fenbo Holdings Limited 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 Fenbo Holdings i.e., Fenbo Holdings and Brunswick go up and down completely randomly.
Pair Corralation between Fenbo Holdings and Brunswick
Given the investment horizon of 90 days Fenbo Holdings Limited is expected to under-perform the Brunswick. In addition to that, Fenbo Holdings is 4.08 times more volatile than Brunswick. It trades about -0.23 of its total potential returns per unit of risk. Brunswick is currently generating about -0.03 per unit of volatility. If you would invest 8,235 in Brunswick on August 30, 2024 and sell it today you would lose (173.00) from holding Brunswick or give up 2.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Fenbo Holdings Limited vs. Brunswick
Performance |
| Timeline |
| Fenbo Holdings |
| Brunswick |
Fenbo Holdings and Brunswick Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fenbo Holdings and Brunswick
The main advantage of trading using opposite Fenbo Holdings and Brunswick positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fenbo Holdings 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.| Fenbo Holdings vs. Beyond Meat | Fenbo Holdings vs. Albertsons Companies | Fenbo Holdings vs. BBB Foods | Fenbo Holdings vs. BCE Inc |
| 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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