Correlation Between Brightspire Capital and Empire State
Can any of the company-specific risk be diversified away by investing in both Brightspire Capital and Empire State 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 Brightspire Capital and Empire State into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brightspire Capital and Empire State Realty, you can compare the effects of market volatilities on Brightspire Capital and Empire State 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 Brightspire Capital with a short position of Empire State. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brightspire Capital and Empire State.
Diversification Opportunities for Brightspire Capital and Empire State
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Brightspire and Empire is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Brightspire Capital and Empire State Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Empire State Realty and Brightspire Capital 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 Brightspire Capital are associated (or correlated) with Empire State. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Empire State Realty has no effect on the direction of Brightspire Capital i.e., Brightspire Capital and Empire State go up and down completely randomly.
Pair Corralation between Brightspire Capital and Empire State
Given the investment horizon of 90 days Brightspire Capital is expected to generate 1.16 times less return on investment than Empire State. In addition to that, Brightspire Capital is 1.71 times more volatile than Empire State Realty. It trades about 0.05 of its total potential returns per unit of risk. Empire State Realty is currently generating about 0.1 per unit of volatility. If you would invest 921.00 in Empire State Realty on September 3, 2024 and sell it today you would earn a total of 175.00 from holding Empire State Realty or generate 19.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brightspire Capital vs. Empire State Realty
Performance |
| Timeline |
| Brightspire Capital |
| Empire State Realty |
Brightspire Capital and Empire State Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brightspire Capital and Empire State
The main advantage of trading using opposite Brightspire Capital and Empire State positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brightspire Capital position performs unexpectedly, Empire State 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 Empire State will offset losses from the drop in Empire State's long position.| Brightspire Capital vs. Essential Properties Realty | Brightspire Capital vs. Armada Hflr Pr | Brightspire Capital vs. CTO Realty Growth | Brightspire Capital vs. Modiv Inc |
| Empire State vs. Broadstone Net Lease | Empire State vs. Armada Hflr Pr | Empire State vs. Brightspire Capital | Empire State vs. Safehold |
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.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |