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
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Brightsphere and CBH is 0.64. 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
If you would invest 919.00 in CBH on November 2, 2024 and sell it today you would earn a total of 0.00 from holding CBH or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brightsphere Investment Group vs. CBH
Performance |
| Timeline |
| Brightsphere Investment |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| 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.The idea behind Brightsphere Investment Group and CBH pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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