Correlation Between Focus Financial and Brightsphere Investment
Can any of the company-specific risk be diversified away by investing in both Focus Financial and Brightsphere Investment 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 Focus Financial and Brightsphere Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Focus Financial Partners and Brightsphere Investment Group, you can compare the effects of market volatilities on Focus Financial and Brightsphere Investment 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 Focus Financial with a short position of Brightsphere Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Focus Financial and Brightsphere Investment.
Diversification Opportunities for Focus Financial and Brightsphere Investment
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Focus and Brightsphere is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Focus Financial Partners and Brightsphere Investment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brightsphere Investment and Focus Financial 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 Focus Financial Partners are associated (or correlated) with Brightsphere Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brightsphere Investment has no effect on the direction of Focus Financial i.e., Focus Financial and Brightsphere Investment go up and down completely randomly.
Pair Corralation between Focus Financial and Brightsphere Investment
If you would invest 2,634 in Brightsphere Investment Group on November 2, 2024 and sell it today you would earn a total of 0.00 from holding Brightsphere Investment Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Focus Financial Partners vs. Brightsphere Investment Group
Performance |
| Timeline |
| Focus Financial Partners |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Brightsphere Investment |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Focus Financial and Brightsphere Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Focus Financial and Brightsphere Investment
The main advantage of trading using opposite Focus Financial and Brightsphere Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Focus Financial position performs unexpectedly, Brightsphere Investment 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 Brightsphere Investment will offset losses from the drop in Brightsphere Investment's long position.| Focus Financial vs. Federated Premier Municipal | Focus Financial vs. Blackrock Muniyield | Focus Financial vs. Diamond Hill Investment | Focus Financial vs. NXG NextGen Infrastructure |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |