Correlation Between Brighthouse Financial and Oxford Square

Can any of the company-specific risk be diversified away by investing in both Brighthouse Financial and Oxford Square 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 Brighthouse Financial and Oxford Square into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Brighthouse Financial and Oxford Square Capital, you can compare the effects of market volatilities on Brighthouse Financial and Oxford Square 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 Brighthouse Financial with a short position of Oxford Square. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brighthouse Financial and Oxford Square.

Diversification Opportunities for Brighthouse Financial and Oxford Square

-0.62

Correlation Coefficient

Brighthouse Financial  Oxford Square

Excellent diversification

The 3 months correlation between Brighthouse and Oxford is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Brighthouse Financial and Oxford Square Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oxford Square Capital and Brighthouse Financial 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 Brighthouse Financial are associated (or correlated) with Oxford Square. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oxford Square Capital has no effect on the direction of Brighthouse Financial i.e., Brighthouse Financial and Oxford Square go up and down completely randomly.

Pair Corralation between Brighthouse Financial and Oxford Square

Assuming the 90 days horizon Brighthouse Financial is expected to under-perform the Oxford Square. In addition to that, Brighthouse Financial is 2.25 times more volatile than Oxford Square Capital. It trades about -0.01 of its total potential returns per unit of risk. Oxford Square Capital is currently generating about 0.08 per unit of volatility. If you would invest  2,445  in Oxford Square Capital on September 22, 2024 and sell it today you would earn a total of  29.00  from holding Oxford Square Capital or generate 1.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Brighthouse Financial  vs.  Oxford Square Capital

Brighthouse Financial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Brighthouse Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Brighthouse Financial is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Oxford Square Capital

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Oxford Square Capital are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Oxford Square is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Brighthouse Financial and Oxford Square

The main advantage of trading using opposite Brighthouse Financial and Oxford Square positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brighthouse Financial position performs unexpectedly, Oxford Square 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 Oxford Square will offset losses from the drop in Oxford Square's long position.

The idea behind Brighthouse Financial and Oxford Square Capital pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.