Correlation Between Brunswick and Vision Marine

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

By analyzing existing cross correlation between Brunswick and Vision Marine Technologies, you can compare the effects of market volatilities on Brunswick and Vision Marine 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 Vision Marine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brunswick and Vision Marine.

Diversification Opportunities for Brunswick and Vision Marine

-0.14

Correlation Coefficient

Brunswick  Vision Marine

Good diversification

The 3 months correlation between Brunswick and Vision is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Brunswick and Vision Marine Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vision Marine Techno 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 Vision Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vision Marine Techno has no effect on the direction of Brunswick i.e., Brunswick and Vision Marine go up and down completely randomly.

Pair Corralation between Brunswick and Vision Marine

Allowing for the 90-day total investment horizon Brunswick is expected to under-perform the Vision Marine. But the stock apears to be less risky and, when comparing its historical volatility, Brunswick is 3.13 times less risky than Vision Marine. The stock trades about -0.31 of its potential returns per unit of risk. The Vision Marine Technologies is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  61.00  in Vision Marine Technologies on February 3, 2024 and sell it today you would lose (1.03) from holding Vision Marine Technologies or give up 1.69% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Brunswick  vs.  Vision Marine Technologies

Brunswick

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brunswick has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Brunswick is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Vision Marine Techno

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vision Marine Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in June 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Brunswick and Vision Marine

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

The idea behind Brunswick and Vision Marine Technologies 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.

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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.