Correlation Between Outfront Media and Brightspire Capital
Can any of the company-specific risk be diversified away by investing in both Outfront Media 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 Outfront Media and Brightspire Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Outfront Media and Brightspire Capital, you can compare the effects of market volatilities on Outfront Media 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 Outfront Media with a short position of Brightspire Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Outfront Media and Brightspire Capital.
Diversification Opportunities for Outfront Media and Brightspire Capital
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Outfront and Brightspire is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Outfront Media and Brightspire Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brightspire Capital and Outfront Media 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 Outfront Media 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 Outfront Media i.e., Outfront Media and Brightspire Capital go up and down completely randomly.
Pair Corralation between Outfront Media and Brightspire Capital
Considering the 90-day investment horizon Outfront Media is expected to generate 1.06 times more return on investment than Brightspire Capital. However, Outfront Media is 1.06 times more volatile than Brightspire Capital. It trades about 0.1 of its potential returns per unit of risk. Brightspire Capital is currently generating about 0.01 per unit of risk. If you would invest 1,173 in Outfront Media on August 27, 2024 and sell it today you would earn a total of 740.00 from holding Outfront Media or generate 63.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Outfront Media vs. Brightspire Capital
Performance |
| Timeline |
| Outfront Media |
| Brightspire Capital |
Outfront Media and Brightspire Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Outfront Media and Brightspire Capital
The main advantage of trading using opposite Outfront Media and Brightspire Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Outfront Media 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.| Outfront Media vs. Broadstone Net Lease | Outfront Media vs. Armada Hflr Pr | Outfront Media vs. Brightspire Capital | Outfront Media vs. Safehold |
| 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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