Correlation Between GreenPower and Brunswick Corp
Can any of the company-specific risk be diversified away by investing in both GreenPower and Brunswick Corp 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 GreenPower and Brunswick Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GreenPower Motor and Brunswick Corp, you can compare the effects of market volatilities on GreenPower and Brunswick Corp 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 GreenPower with a short position of Brunswick Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenPower and Brunswick Corp.
Diversification Opportunities for GreenPower and Brunswick Corp
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GreenPower and Brunswick is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding GreenPower Motor and Brunswick Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brunswick Corp and GreenPower 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 GreenPower Motor are associated (or correlated) with Brunswick Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brunswick Corp has no effect on the direction of GreenPower i.e., GreenPower and Brunswick Corp go up and down completely randomly.
Pair Corralation between GreenPower and Brunswick Corp
Allowing for the 90-day total investment horizon GreenPower Motor is expected to generate 6.9 times more return on investment than Brunswick Corp. However, GreenPower is 6.9 times more volatile than Brunswick Corp. It trades about 0.02 of its potential returns per unit of risk. Brunswick Corp is currently generating about -0.17 per unit of risk. If you would invest 101.00 in GreenPower Motor on August 31, 2024 and sell it today you would earn a total of 0.00 from holding GreenPower Motor or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GreenPower Motor vs. Brunswick Corp
Performance |
| Timeline |
| GreenPower Motor |
| Brunswick Corp |
GreenPower and Brunswick Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GreenPower and Brunswick Corp
The main advantage of trading using opposite GreenPower and Brunswick Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenPower position performs unexpectedly, Brunswick Corp 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 Corp will offset losses from the drop in Brunswick Corp's long position.| GreenPower vs. Phoenix Motor Common | GreenPower vs. Envirotech Vehicles | GreenPower vs. Volcon Inc | GreenPower vs. Zapp Electric Vehicles |
| Brunswick Corp vs. BRP Inc | Brunswick Corp vs. Vision Marine Technologies | Brunswick Corp vs. EZGO Technologies | Brunswick Corp vs. Harley Davidson |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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