Correlation Between Brighthouse Financial and Primerica
Can any of the company-specific risk be diversified away by investing in both Brighthouse Financial and Primerica 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 Primerica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brighthouse Financial and Primerica, you can compare the effects of market volatilities on Brighthouse Financial and Primerica 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 Primerica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brighthouse Financial and Primerica.
Diversification Opportunities for Brighthouse Financial and Primerica
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Brighthouse and Primerica is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Brighthouse Financial and Primerica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Primerica 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 Primerica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Primerica has no effect on the direction of Brighthouse Financial i.e., Brighthouse Financial and Primerica go up and down completely randomly.
Pair Corralation between Brighthouse Financial and Primerica
Assuming the 90 days horizon Brighthouse Financial is expected to under-perform the Primerica. But the preferred stock apears to be less risky and, when comparing its historical volatility, Brighthouse Financial is 1.59 times less risky than Primerica. The preferred stock trades about -0.17 of its potential returns per unit of risk. The Primerica is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 26,350 in Primerica on August 26, 2024 and sell it today you would earn a total of 3,823 from holding Primerica or generate 14.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brighthouse Financial vs. Primerica
Performance |
| Timeline |
| Brighthouse Financial |
| Primerica |
Brighthouse Financial and Primerica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brighthouse Financial and Primerica
The main advantage of trading using opposite Brighthouse Financial and Primerica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brighthouse Financial position performs unexpectedly, Primerica 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 Primerica will offset losses from the drop in Primerica's long position.| Brighthouse Financial vs. Brighthouse Financial | Brighthouse Financial vs. Brighthouse Financial | Brighthouse Financial vs. Fifth Third Bancorp | Brighthouse Financial vs. First Citizens BancShares |
| Primerica vs. CNO Financial Group | Primerica vs. Aflac Incorporated | Primerica vs. Prudential Public Limited | Primerica vs. FG Annuities Life |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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