Correlation Between United Parks and Brunswick
Can any of the company-specific risk be diversified away by investing in both United Parks 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 United Parks and Brunswick into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Parks Resorts and Brunswick, you can compare the effects of market volatilities on United Parks 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 United Parks with a short position of Brunswick. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Parks and Brunswick.
Diversification Opportunities for United Parks and Brunswick
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between United and Brunswick is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding United Parks Resorts and Brunswick in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brunswick and United Parks 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 United Parks Resorts 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 United Parks i.e., United Parks and Brunswick go up and down completely randomly.
Pair Corralation between United Parks and Brunswick
Given the investment horizon of 90 days United Parks is expected to generate 1.38 times less return on investment than Brunswick. In addition to that, United Parks is 1.05 times more volatile than Brunswick. It trades about 0.02 of its total potential returns per unit of risk. Brunswick is currently generating about 0.03 per unit of volatility. If you would invest 6,923 in Brunswick on August 29, 2024 and sell it today you would earn a total of 1,151 from holding Brunswick or generate 16.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Parks Resorts vs. Brunswick
Performance |
| Timeline |
| United Parks Resorts |
| Brunswick |
United Parks and Brunswick Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Parks and Brunswick
The main advantage of trading using opposite United Parks and Brunswick positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Parks 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.| United Parks vs. Vita Coco | United Parks vs. Universal | United Parks vs. Willamette Valley Vineyards | United Parks vs. Japan Tobacco ADR |
| Brunswick vs. MCBC Holdings | Brunswick vs. Winnebago Industries | Brunswick vs. LCI Industries | Brunswick vs. Thor 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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