Correlation Between BrightView Holdings and Lichen China
Can any of the company-specific risk be diversified away by investing in both BrightView Holdings and Lichen China 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 BrightView Holdings and Lichen China into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BrightView Holdings and Lichen China Limited, you can compare the effects of market volatilities on BrightView Holdings and Lichen China 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 BrightView Holdings with a short position of Lichen China. Check out your portfolio center. Please also check ongoing floating volatility patterns of BrightView Holdings and Lichen China.
Diversification Opportunities for BrightView Holdings and Lichen China
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BrightView and Lichen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BrightView Holdings and Lichen China Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lichen China Limited and BrightView Holdings 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 BrightView Holdings are associated (or correlated) with Lichen China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lichen China Limited has no effect on the direction of BrightView Holdings i.e., BrightView Holdings and Lichen China go up and down completely randomly.
Pair Corralation between BrightView Holdings and Lichen China
Allowing for the 90-day total investment horizon BrightView Holdings is expected to generate 0.19 times more return on investment than Lichen China. However, BrightView Holdings is 5.14 times less risky than Lichen China. It trades about -0.08 of its potential returns per unit of risk. Lichen China Limited is currently generating about -0.36 per unit of risk. If you would invest 1,838 in BrightView Holdings on September 13, 2024 and sell it today you would lose (130.00) from holding BrightView Holdings or give up 7.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BrightView Holdings vs. Lichen China Limited
Performance |
| Timeline |
| BrightView Holdings |
| Lichen China Limited |
BrightView Holdings and Lichen China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BrightView Holdings and Lichen China
The main advantage of trading using opposite BrightView Holdings and Lichen China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BrightView Holdings position performs unexpectedly, Lichen China 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 Lichen China will offset losses from the drop in Lichen China's long position.| BrightView Holdings vs. Network 1 Technologies | BrightView Holdings vs. Civeo Corp | BrightView Holdings vs. Maximus | BrightView Holdings vs. CBIZ Inc |
| Lichen China vs. First Advantage Corp | Lichen China vs. Discount Print USA | Lichen China vs. Cass Information Systems | Lichen China vs. Civeo Corp |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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