Correlation Between Brightspire Capital and Lamar Advertising
Can any of the company-specific risk be diversified away by investing in both Brightspire Capital and Lamar Advertising 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 Lamar Advertising into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brightspire Capital and Lamar Advertising, you can compare the effects of market volatilities on Brightspire Capital and Lamar Advertising 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 Lamar Advertising. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brightspire Capital and Lamar Advertising.
Diversification Opportunities for Brightspire Capital and Lamar Advertising
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Brightspire and Lamar is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Brightspire Capital and Lamar Advertising in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lamar Advertising 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 Lamar Advertising. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lamar Advertising has no effect on the direction of Brightspire Capital i.e., Brightspire Capital and Lamar Advertising go up and down completely randomly.
Pair Corralation between Brightspire Capital and Lamar Advertising
Given the investment horizon of 90 days Brightspire Capital is expected to generate 2.4 times more return on investment than Lamar Advertising. However, Brightspire Capital is 2.4 times more volatile than Lamar Advertising. It trades about 0.07 of its potential returns per unit of risk. Lamar Advertising is currently generating about 0.12 per unit of risk. If you would invest 571.00 in Brightspire Capital on August 31, 2024 and sell it today you would earn a total of 65.00 from holding Brightspire Capital or generate 11.38% 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. Lamar Advertising
Performance |
| Timeline |
| Brightspire Capital |
| Lamar Advertising |
Brightspire Capital and Lamar Advertising Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brightspire Capital and Lamar Advertising
The main advantage of trading using opposite Brightspire Capital and Lamar Advertising positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brightspire Capital position performs unexpectedly, Lamar Advertising 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 Lamar Advertising will offset losses from the drop in Lamar Advertising'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 |
| Lamar Advertising vs. Rayonier | Lamar Advertising vs. Gaming Leisure Properties | Lamar Advertising vs. EPR Properties | Lamar Advertising vs. AFC Gamma |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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