Correlation Between Jupai Holdings and Brightsphere Investment
Can any of the company-specific risk be diversified away by investing in both Jupai Holdings 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 Jupai Holdings and Brightsphere Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jupai Holdings Limited and Brightsphere Investment Group, you can compare the effects of market volatilities on Jupai Holdings 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 Jupai Holdings with a short position of Brightsphere Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jupai Holdings and Brightsphere Investment.
Diversification Opportunities for Jupai Holdings and Brightsphere Investment
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jupai and Brightsphere is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Jupai Holdings Limited and Brightsphere Investment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brightsphere Investment and Jupai 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 Jupai Holdings Limited 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 Jupai Holdings i.e., Jupai Holdings and Brightsphere Investment go up and down completely randomly.
Pair Corralation between Jupai Holdings and Brightsphere Investment
If you would invest 2,644 in Brightsphere Investment Group on August 28, 2024 and sell it today you would earn a total of 456.00 from holding Brightsphere Investment Group or generate 17.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Jupai Holdings Limited vs. Brightsphere Investment Group
Performance |
| Timeline |
| Jupai Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Brightsphere Investment |
Jupai Holdings and Brightsphere Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jupai Holdings and Brightsphere Investment
The main advantage of trading using opposite Jupai Holdings and Brightsphere Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jupai Holdings 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.The idea behind Jupai Holdings Limited and Brightsphere Investment Group 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.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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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