Correlation Between One Liberty and Brightspire Capital
Can any of the company-specific risk be diversified away by investing in both One Liberty 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 One Liberty and Brightspire Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between One Liberty Properties and Brightspire Capital, you can compare the effects of market volatilities on One Liberty 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 One Liberty with a short position of Brightspire Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of One Liberty and Brightspire Capital.
Diversification Opportunities for One Liberty and Brightspire Capital
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between One and Brightspire is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding One Liberty Properties and Brightspire Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brightspire Capital and One Liberty 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 One Liberty Properties 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 One Liberty i.e., One Liberty and Brightspire Capital go up and down completely randomly.
Pair Corralation between One Liberty and Brightspire Capital
Considering the 90-day investment horizon One Liberty is expected to generate 2.7 times less return on investment than Brightspire Capital. But when comparing it to its historical volatility, One Liberty Properties is 2.67 times less risky than Brightspire Capital. It trades about 0.19 of its potential returns per unit of risk. Brightspire Capital is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 530.00 in Brightspire Capital on August 27, 2024 and sell it today you would earn a total of 93.00 from holding Brightspire Capital or generate 17.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
One Liberty Properties vs. Brightspire Capital
Performance |
| Timeline |
| One Liberty Properties |
| Brightspire Capital |
One Liberty and Brightspire Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with One Liberty and Brightspire Capital
The main advantage of trading using opposite One Liberty and Brightspire Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if One Liberty 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.| One Liberty vs. Generationome Properties | One Liberty vs. Modiv Inc | One Liberty vs. Armada Hflr Pr | One Liberty vs. NexPoint Diversified Real |
| 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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