Correlation Between Brunswick and Iliad SA

Can any of the company-specific risk be diversified away by investing in both Brunswick and Iliad SA 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 Brunswick and Iliad SA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Brunswick and Iliad SA, you can compare the effects of market volatilities on Brunswick and Iliad SA 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 Brunswick with a short position of Iliad SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brunswick and Iliad SA.

Diversification Opportunities for Brunswick and Iliad SA

0.0

Correlation Coefficient

Brunswick  Iliad SA

Pay attention - limited upside

The 3 months correlation between Brunswick and Iliad is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Brunswick and Iliad SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iliad SA and Brunswick 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 Brunswick are associated (or correlated) with Iliad SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iliad SA has no effect on the direction of Brunswick i.e., Brunswick and Iliad SA go up and down completely randomly.

Pair Corralation between Brunswick and Iliad SA

If you would invest  7,208  in Brunswick on January 31, 2024 and sell it today you would earn a total of  1,003  from holding Brunswick or generate 13.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.2%
Values	Daily Returns

Brunswick  vs.  Iliad SA

Brunswick

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Brunswick are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Brunswick is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Iliad SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Iliad SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Iliad SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Brunswick and Iliad SA

The main advantage of trading using opposite Brunswick and Iliad SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brunswick position performs unexpectedly, Iliad SA 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 Iliad SA will offset losses from the drop in Iliad SA's long position.

The idea behind Brunswick and Iliad SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.