Correlation Between Shoals Technologies and Brightsphere Investment
Can any of the company-specific risk be diversified away by investing in both Shoals Technologies and Brightsphere Investment 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 Shoals Technologies and Brightsphere Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shoals Technologies Group and Brightsphere Investment Group, you can compare the effects of market volatilities on Shoals Technologies and Brightsphere Investment 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 Shoals Technologies with a short position of Brightsphere Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shoals Technologies and Brightsphere Investment.
Diversification Opportunities for Shoals Technologies and Brightsphere Investment
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shoals and Brightsphere is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Shoals Technologies Group and Brightsphere Investment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brightsphere Investment and Shoals Technologies 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 Shoals Technologies Group are associated (or correlated) with Brightsphere Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brightsphere Investment has no effect on the direction of Shoals Technologies i.e., Shoals Technologies and Brightsphere Investment go up and down completely randomly.
Pair Corralation between Shoals Technologies and Brightsphere Investment
Given the investment horizon of 90 days Shoals Technologies Group is expected to generate 4.06 times more return on investment than Brightsphere Investment. However, Shoals Technologies is 4.06 times more volatile than Brightsphere Investment Group. It trades about 0.05 of its potential returns per unit of risk. Brightsphere Investment Group is currently generating about -0.43 per unit of risk. If you would invest 454.00 in Shoals Technologies Group on October 20, 2024 and sell it today you would earn a total of 9.00 from holding Shoals Technologies Group or generate 1.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 45.0% |
| Values | Daily Returns |
Shoals Technologies Group vs. Brightsphere Investment Group
Performance |
| Timeline |
| Shoals Technologies |
| Brightsphere Investment |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
Shoals Technologies and Brightsphere Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shoals Technologies and Brightsphere Investment
The main advantage of trading using opposite Shoals Technologies and Brightsphere Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shoals Technologies position performs unexpectedly, Brightsphere Investment 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 Brightsphere Investment will offset losses from the drop in Brightsphere Investment's long position.| Shoals Technologies vs. Array Technologies | Shoals Technologies vs. Sunnova Energy International | Shoals Technologies vs. Fluence Energy | Shoals Technologies vs. Playtika Holding Corp |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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