Correlation Between BrightSpring Health and ATRenew
Can any of the company-specific risk be diversified away by investing in both BrightSpring Health and ATRenew 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 BrightSpring Health and ATRenew into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BrightSpring Health Services, and ATRenew Inc DRC, you can compare the effects of market volatilities on BrightSpring Health and ATRenew 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 BrightSpring Health with a short position of ATRenew. Check out your portfolio center. Please also check ongoing floating volatility patterns of BrightSpring Health and ATRenew.
Diversification Opportunities for BrightSpring Health and ATRenew
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BrightSpring and ATRenew is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding BrightSpring Health Services, and ATRenew Inc DRC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATRenew Inc DRC and BrightSpring Health 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 BrightSpring Health Services, are associated (or correlated) with ATRenew. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATRenew Inc DRC has no effect on the direction of BrightSpring Health i.e., BrightSpring Health and ATRenew go up and down completely randomly.
Pair Corralation between BrightSpring Health and ATRenew
Assuming the 90 days horizon BrightSpring Health is expected to generate 1.67 times less return on investment than ATRenew. But when comparing it to its historical volatility, BrightSpring Health Services, is 2.31 times less risky than ATRenew. It trades about 0.1 of its potential returns per unit of risk. ATRenew Inc DRC is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 173.00 in ATRenew Inc DRC on September 14, 2024 and sell it today you would earn a total of 132.00 from holding ATRenew Inc DRC or generate 76.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 89.96% |
| Values | Daily Returns |
BrightSpring Health Services, vs. ATRenew Inc DRC
Performance |
| Timeline |
| BrightSpring Health |
| ATRenew Inc DRC |
BrightSpring Health and ATRenew Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BrightSpring Health and ATRenew
The main advantage of trading using opposite BrightSpring Health and ATRenew positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BrightSpring Health position performs unexpectedly, ATRenew 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 ATRenew will offset losses from the drop in ATRenew's long position.| BrightSpring Health vs. WiMi Hologram Cloud | BrightSpring Health vs. Brunswick | BrightSpring Health vs. Sphere Entertainment Co | BrightSpring Health vs. Skechers USA |
| ATRenew vs. Arhaus Inc | ATRenew vs. Floor Decor Holdings | ATRenew vs. Live Ventures | ATRenew vs. Macys Inc |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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