Correlation Between Brighthouse Financial and Sanlam
Can any of the company-specific risk be diversified away by investing in both Brighthouse Financial and Sanlam 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 Brighthouse Financial and Sanlam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brighthouse Financial and Sanlam Ltd PK, you can compare the effects of market volatilities on Brighthouse Financial and Sanlam 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 Brighthouse Financial with a short position of Sanlam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brighthouse Financial and Sanlam.
Diversification Opportunities for Brighthouse Financial and Sanlam
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Brighthouse and Sanlam is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Brighthouse Financial and Sanlam Ltd PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanlam Ltd PK and Brighthouse Financial 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 Brighthouse Financial are associated (or correlated) with Sanlam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanlam Ltd PK has no effect on the direction of Brighthouse Financial i.e., Brighthouse Financial and Sanlam go up and down completely randomly.
Pair Corralation between Brighthouse Financial and Sanlam
Considering the 90-day investment horizon Brighthouse Financial is expected to generate 8.34 times less return on investment than Sanlam. In addition to that, Brighthouse Financial is 1.03 times more volatile than Sanlam Ltd PK. It trades about 0.01 of its total potential returns per unit of risk. Sanlam Ltd PK is currently generating about 0.08 per unit of volatility. If you would invest 480.00 in Sanlam Ltd PK on September 2, 2024 and sell it today you would earn a total of 515.00 from holding Sanlam Ltd PK or generate 107.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brighthouse Financial vs. Sanlam Ltd PK
Performance |
| Timeline |
| Brighthouse Financial |
| Sanlam Ltd PK |
Brighthouse Financial and Sanlam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brighthouse Financial and Sanlam
The main advantage of trading using opposite Brighthouse Financial and Sanlam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brighthouse Financial position performs unexpectedly, Sanlam 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 Sanlam will offset losses from the drop in Sanlam's long position.| Brighthouse Financial vs. Prudential Financial | Brighthouse Financial vs. Lincoln National | Brighthouse Financial vs. Aflac Incorporated | Brighthouse Financial vs. Unum Group |
| Sanlam vs. Ping An Insurance | Sanlam vs. CNO Financial Group | Sanlam vs. Genworth Financial | Sanlam vs. MetLife Preferred Stock |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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