Correlation Between Maiden Holdings and Brunswick
Can any of the company-specific risk be diversified away by investing in both Maiden 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 Maiden Holdings and Brunswick into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maiden Holdings and Brunswick, you can compare the effects of market volatilities on Maiden 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 Maiden Holdings with a short position of Brunswick. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maiden Holdings and Brunswick.
Diversification Opportunities for Maiden Holdings and Brunswick
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Maiden and Brunswick is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Maiden Holdings and Brunswick in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brunswick and Maiden 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 Maiden Holdings 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 Maiden Holdings i.e., Maiden Holdings and Brunswick go up and down completely randomly.
Pair Corralation between Maiden Holdings and Brunswick
Given the investment horizon of 90 days Maiden Holdings is expected to generate 1.21 times more return on investment than Brunswick. However, Maiden Holdings is 1.21 times more volatile than Brunswick. It trades about 0.03 of its potential returns per unit of risk. Brunswick is currently generating about -0.17 per unit of risk. If you would invest 1,521 in Maiden Holdings on November 29, 2024 and sell it today you would earn a total of 10.00 from holding Maiden Holdings or generate 0.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Maiden Holdings vs. Brunswick
Performance |
| Timeline |
| Maiden Holdings |
| Brunswick |
Maiden Holdings and Brunswick Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maiden Holdings and Brunswick
The main advantage of trading using opposite Maiden Holdings and Brunswick positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maiden 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.| Maiden Holdings vs. Maiden Holdings North | Maiden Holdings vs. Reinsurance Group of | Maiden Holdings vs. Entergy Arkansas LLC | Maiden Holdings vs. Entergy New Orleans |
| 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 Stocks Directory module to find actively traded stocks across global markets.
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