Correlation Between Office Properties and Brighthouse Financial
Can any of the company-specific risk be diversified away by investing in both Office Properties 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 Office Properties and Brighthouse Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Office Properties Income and Brighthouse Financial, you can compare the effects of market volatilities on Office Properties 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 Office Properties with a short position of Brighthouse Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Office Properties and Brighthouse Financial.
Diversification Opportunities for Office Properties and Brighthouse Financial
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Office and Brighthouse is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Office Properties Income and Brighthouse Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brighthouse Financial and Office Properties 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 Office Properties Income 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 Office Properties i.e., Office Properties and Brighthouse Financial go up and down completely randomly.
Pair Corralation between Office Properties and Brighthouse Financial
Assuming the 90 days horizon Office Properties is expected to generate 1.12 times less return on investment than Brighthouse Financial. In addition to that, Office Properties is 2.22 times more volatile than Brighthouse Financial. It trades about 0.02 of its total potential returns per unit of risk. Brighthouse Financial is currently generating about 0.06 per unit of volatility. If you would invest 2,031 in Brighthouse Financial on September 12, 2024 and sell it today you would earn a total of 436.00 from holding Brighthouse Financial or generate 21.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Office Properties Income vs. Brighthouse Financial
Performance |
| Timeline |
| Office Properties Income |
| Brighthouse Financial |
Office Properties and Brighthouse Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Office Properties and Brighthouse Financial
The main advantage of trading using opposite Office Properties and Brighthouse Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Office Properties 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.| Office Properties vs. United States Cellular | Office Properties vs. United States Cellular | Office Properties vs. DBA Sempra 5750 | Office Properties vs. Hancock Whitney |
| Brighthouse Financial vs. Brighthouse Financial | Brighthouse Financial vs. Unum Group | Brighthouse Financial vs. Argo Group 65 | Brighthouse Financial vs. Arch Capital Group |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |