Correlation Between Brunswick Corp and Retailing Fund

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

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

Diversification Opportunities for Brunswick Corp and Retailing Fund

0.81

Correlation Coefficient

Brunswick Corp  Retailing Fund

Very poor diversification

The 3 months correlation between Brunswick and Retailing is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Brunswick Corp and Retailing Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retailing Fund Class and Brunswick Corp 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 Corp are associated (or correlated) with Retailing Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retailing Fund Class has no effect on the direction of Brunswick Corp i.e., Brunswick Corp and Retailing Fund go up and down completely randomly.

Pair Corralation between Brunswick Corp and Retailing Fund

Assuming the 90 days horizon Brunswick Corp is expected to generate 0.57 times more return on investment than Retailing Fund. However, Brunswick Corp is 1.76 times less risky than Retailing Fund. It trades about 0.34 of its potential returns per unit of risk. Retailing Fund Class is currently generating about 0.15 per unit of risk. If you would invest  2,199  in Brunswick Corp on May 4, 2025 and sell it today you would earn a total of  271.00  from holding Brunswick Corp or generate 12.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.41%
Values	Daily Returns

Brunswick Corp  vs.  Retailing Fund Class

Brunswick Corp

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Brunswick Corp are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Brunswick Corp may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Retailing Fund Class

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Retailing Fund Class are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Retailing Fund may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Brunswick Corp and Retailing Fund

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

The idea behind Brunswick Corp and Retailing Fund Class 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.