Correlation Between Brightsphere Investment and CBH
Can any of the company-specific risk be diversified away by investing in both Brightsphere Investment and CBH 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 Brightsphere Investment and CBH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brightsphere Investment Group and CBH, you can compare the effects of market volatilities on Brightsphere Investment and CBH 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 Brightsphere Investment with a short position of CBH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brightsphere Investment and CBH.
Diversification Opportunities for Brightsphere Investment and CBH
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Brightsphere and CBH is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Brightsphere Investment Group and CBH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBH and Brightsphere Investment 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 Brightsphere Investment Group are associated (or correlated) with CBH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBH has no effect on the direction of Brightsphere Investment i.e., Brightsphere Investment and CBH go up and down completely randomly.
Pair Corralation between Brightsphere Investment and CBH
Given the investment horizon of 90 days Brightsphere Investment Group is expected to generate 7.06 times more return on investment than CBH. However, Brightsphere Investment is 7.06 times more volatile than CBH. It trades about 0.1 of its potential returns per unit of risk. CBH is currently generating about 0.16 per unit of risk. If you would invest 2,209 in Brightsphere Investment Group on August 28, 2024 and sell it today you would earn a total of 891.00 from holding Brightsphere Investment Group or generate 40.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 71.29% |
| Values | Daily Returns |
Brightsphere Investment Group vs. CBH
Performance |
| Timeline |
| Brightsphere Investment |
| CBH |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Brightsphere Investment and CBH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brightsphere Investment and CBH
The main advantage of trading using opposite Brightsphere Investment and CBH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brightsphere Investment position performs unexpectedly, CBH 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 CBH will offset losses from the drop in CBH's long position.| Brightsphere Investment vs. PowerUp Acquisition Corp | Brightsphere Investment vs. Aurora Innovation | Brightsphere Investment vs. HUMANA INC | Brightsphere Investment vs. Aquagold International |
| CBH vs. Eaton Vance National | CBH vs. Invesco High Income | CBH vs. Blackrock Muniholdings Ny | CBH vs. Nuveen California Select |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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