Correlation Between Brighthouse Financial and Aviva PLC
Can any of the company-specific risk be diversified away by investing in both Brighthouse Financial and Aviva PLC 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 Aviva PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brighthouse Financial and Aviva PLC ADR, you can compare the effects of market volatilities on Brighthouse Financial and Aviva PLC 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 Aviva PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brighthouse Financial and Aviva PLC.
Diversification Opportunities for Brighthouse Financial and Aviva PLC
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Brighthouse and Aviva is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Brighthouse Financial and Aviva PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aviva PLC ADR 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 Aviva PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aviva PLC ADR has no effect on the direction of Brighthouse Financial i.e., Brighthouse Financial and Aviva PLC go up and down completely randomly.
Pair Corralation between Brighthouse Financial and Aviva PLC
If you would invest 1,040 in Aviva PLC ADR on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Aviva PLC ADR or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.35% |
| Values | Daily Returns |
Brighthouse Financial vs. Aviva PLC ADR
Performance |
| Timeline |
| Brighthouse Financial |
| Aviva PLC ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Brighthouse Financial and Aviva PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brighthouse Financial and Aviva PLC
The main advantage of trading using opposite Brighthouse Financial and Aviva PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brighthouse Financial position performs unexpectedly, Aviva PLC 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 Aviva PLC will offset losses from the drop in Aviva PLC's long position.| Brighthouse Financial vs. Jackson Financial | Brighthouse Financial vs. Brighthouse Financial | Brighthouse Financial vs. MetLife Preferred Stock |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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