Correlation Between CTO Realty and Brightspire Capital
Can any of the company-specific risk be diversified away by investing in both CTO Realty and Brightspire Capital 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 CTO Realty and Brightspire Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CTO Realty Growth and Brightspire Capital, you can compare the effects of market volatilities on CTO Realty and Brightspire Capital 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 CTO Realty with a short position of Brightspire Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTO Realty and Brightspire Capital.
Diversification Opportunities for CTO Realty and Brightspire Capital
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CTO and Brightspire is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding CTO Realty Growth and Brightspire Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brightspire Capital and CTO Realty 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 CTO Realty Growth are associated (or correlated) with Brightspire Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brightspire Capital has no effect on the direction of CTO Realty i.e., CTO Realty and Brightspire Capital go up and down completely randomly.
Pair Corralation between CTO Realty and Brightspire Capital
Considering the 90-day investment horizon CTO Realty is expected to generate 23.03 times less return on investment than Brightspire Capital. But when comparing it to its historical volatility, CTO Realty Growth is 3.51 times less risky than Brightspire Capital. It trades about 0.03 of its potential returns per unit of risk. Brightspire Capital is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 533.00 in Brightspire Capital on August 24, 2024 and sell it today you would earn a total of 85.00 from holding Brightspire Capital or generate 15.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CTO Realty Growth vs. Brightspire Capital
Performance |
| Timeline |
| CTO Realty Growth |
| Brightspire Capital |
CTO Realty and Brightspire Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTO Realty and Brightspire Capital
The main advantage of trading using opposite CTO Realty and Brightspire Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTO Realty position performs unexpectedly, Brightspire Capital 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 Brightspire Capital will offset losses from the drop in Brightspire Capital's long position.| CTO Realty vs. Essential Properties Realty | CTO Realty vs. Armada Hflr Pr | CTO Realty vs. Brightspire Capital | CTO Realty vs. Broadstone Net Lease |
| Brightspire Capital vs. Essential Properties Realty | Brightspire Capital vs. Armada Hflr Pr | Brightspire Capital vs. CTO Realty Growth | Brightspire Capital vs. Modiv 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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