Correlation Between ATRenew and BrightSpring Health
Can any of the company-specific risk be diversified away by investing in both ATRenew and BrightSpring Health 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 ATRenew and BrightSpring Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATRenew Inc DRC and BrightSpring Health Services,, you can compare the effects of market volatilities on ATRenew and BrightSpring Health 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 ATRenew with a short position of BrightSpring Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATRenew and BrightSpring Health.
Diversification Opportunities for ATRenew and BrightSpring Health
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ATRenew and BrightSpring is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding ATRenew Inc DRC and BrightSpring Health Services, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BrightSpring Health and ATRenew 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 ATRenew Inc DRC are associated (or correlated) with BrightSpring Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BrightSpring Health has no effect on the direction of ATRenew i.e., ATRenew and BrightSpring Health go up and down completely randomly.
Pair Corralation between ATRenew and BrightSpring Health
Given the investment horizon of 90 days ATRenew Inc DRC is expected to generate 2.31 times more return on investment than BrightSpring Health. However, ATRenew is 2.31 times more volatile than BrightSpring Health Services,. It trades about 0.07 of its potential returns per unit of risk. BrightSpring Health Services, is currently generating about 0.1 per unit of risk. If you would invest 173.00 in ATRenew Inc DRC on September 14, 2024 and sell it today you would earn a total of 132.00 from holding ATRenew Inc DRC or generate 76.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 89.96% |
| Values | Daily Returns |
ATRenew Inc DRC vs. BrightSpring Health Services,
Performance |
| Timeline |
| ATRenew Inc DRC |
| BrightSpring Health |
ATRenew and BrightSpring Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATRenew and BrightSpring Health
The main advantage of trading using opposite ATRenew and BrightSpring Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATRenew position performs unexpectedly, BrightSpring Health 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 BrightSpring Health will offset losses from the drop in BrightSpring Health's long position.| ATRenew vs. Arhaus Inc | ATRenew vs. Floor Decor Holdings | ATRenew vs. Live Ventures | ATRenew vs. Macys Inc |
| BrightSpring Health vs. WiMi Hologram Cloud | BrightSpring Health vs. Brunswick | BrightSpring Health vs. Sphere Entertainment Co | BrightSpring Health vs. Skechers USA |
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 CEOs Directory module to screen CEOs from public companies around the world.
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