Correlation Between Brighthouse Financial and Great Elm
Can any of the company-specific risk be diversified away by investing in both Brighthouse Financial and Great Elm 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 Great Elm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brighthouse Financial and Great Elm Capital, you can compare the effects of market volatilities on Brighthouse Financial and Great Elm 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 Great Elm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brighthouse Financial and Great Elm.
Diversification Opportunities for Brighthouse Financial and Great Elm
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Brighthouse and Great is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Brighthouse Financial and Great Elm Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Elm Capital 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 Great Elm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Elm Capital has no effect on the direction of Brighthouse Financial i.e., Brighthouse Financial and Great Elm go up and down completely randomly.
Pair Corralation between Brighthouse Financial and Great Elm
If you would invest 2,362 in Brighthouse Financial on September 3, 2024 and sell it today you would earn a total of 83.00 from holding Brighthouse Financial or generate 3.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 1.56% |
| Values | Daily Returns |
Brighthouse Financial vs. Great Elm Capital
Performance |
| Timeline |
| Brighthouse Financial |
| Great Elm Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Brighthouse Financial and Great Elm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brighthouse Financial and Great Elm
The main advantage of trading using opposite Brighthouse Financial and Great Elm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brighthouse Financial position performs unexpectedly, Great Elm 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 Great Elm will offset losses from the drop in Great Elm's long position.| Brighthouse Financial vs. Brighthouse Financial | Brighthouse Financial vs. Unum Group | Brighthouse Financial vs. Argo Group 65 | Brighthouse Financial vs. Arch Capital Group |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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