Correlation Between Loews Corp and Brighthouse Financial
Can any of the company-specific risk be diversified away by investing in both Loews Corp and Brighthouse Financial 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 Loews Corp and Brighthouse Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Loews Corp and Brighthouse Financial, you can compare the effects of market volatilities on Loews Corp and Brighthouse Financial 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 Loews Corp with a short position of Brighthouse Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loews Corp and Brighthouse Financial.
Diversification Opportunities for Loews Corp and Brighthouse Financial
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Loews and Brighthouse is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Loews Corp and Brighthouse Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brighthouse Financial and Loews Corp 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 Loews Corp are associated (or correlated) with Brighthouse Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brighthouse Financial has no effect on the direction of Loews Corp i.e., Loews Corp and Brighthouse Financial go up and down completely randomly.
Pair Corralation between Loews Corp and Brighthouse Financial
Taking into account the 90-day investment horizon Loews Corp is expected to generate 1.8 times more return on investment than Brighthouse Financial. However, Loews Corp is 1.8 times more volatile than Brighthouse Financial. It trades about 0.25 of its potential returns per unit of risk. Brighthouse Financial is currently generating about -0.29 per unit of risk. If you would invest 7,970 in Loews Corp on August 30, 2024 and sell it today you would earn a total of 735.00 from holding Loews Corp or generate 9.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Loews Corp vs. Brighthouse Financial
Performance |
| Timeline |
| Loews Corp |
| Brighthouse Financial |
Loews Corp and Brighthouse Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loews Corp and Brighthouse Financial
The main advantage of trading using opposite Loews Corp and Brighthouse Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loews Corp position performs unexpectedly, Brighthouse Financial 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 Brighthouse Financial will offset losses from the drop in Brighthouse Financial's long position.| Loews Corp vs. Horace Mann Educators | Loews Corp vs. Global Indemnity PLC | Loews Corp vs. Selective Insurance Group | Loews Corp vs. Kemper |
| Brighthouse Financial vs. Brighthouse Financial | Brighthouse Financial vs. Brighthouse Financial | Brighthouse Financial vs. Brighthouse Financial | Brighthouse Financial vs. First Citizens BancShares |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |