Correlation Between Sachem Capital and Brighthouse Financial
Can any of the company-specific risk be diversified away by investing in both Sachem Capital 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 Sachem Capital and Brighthouse Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sachem Capital Corp and Brighthouse Financial, you can compare the effects of market volatilities on Sachem Capital 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 Sachem Capital with a short position of Brighthouse Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sachem Capital and Brighthouse Financial.
Diversification Opportunities for Sachem Capital and Brighthouse Financial
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sachem and Brighthouse is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Sachem Capital Corp and Brighthouse Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brighthouse Financial and Sachem Capital 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 Sachem Capital 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 Sachem Capital i.e., Sachem Capital and Brighthouse Financial go up and down completely randomly.
Pair Corralation between Sachem Capital and Brighthouse Financial
Given the investment horizon of 90 days Sachem Capital Corp is expected to generate 0.15 times more return on investment than Brighthouse Financial. However, Sachem Capital Corp is 6.58 times less risky than Brighthouse Financial. It trades about 0.0 of its potential returns per unit of risk. Brighthouse Financial is currently generating about -0.08 per unit of risk. If you would invest 2,506 in Sachem Capital Corp on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Sachem Capital Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sachem Capital Corp vs. Brighthouse Financial
Performance |
| Timeline |
| Sachem Capital Corp |
| Brighthouse Financial |
Sachem Capital and Brighthouse Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sachem Capital and Brighthouse Financial
The main advantage of trading using opposite Sachem Capital and Brighthouse Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sachem Capital 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.| Sachem Capital vs. Sachem Capital Corp | Sachem Capital vs. Eagle Point Credit | Sachem Capital vs. B Riley Financial |
| 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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