Correlation Between Brightspire Capital and Ascendas India

Can any of the company-specific risk be diversified away by investing in both Brightspire Capital and Ascendas India 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 Brightspire Capital and Ascendas India into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Brightspire Capital and Ascendas India

0.03

Correlation Coefficient

Brightspire Capital  Ascendas India

Significant diversification

The 3 months correlation between Brightspire and Ascendas is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Brightspire Capital and Ascendas India Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascendas India Trust and Brightspire 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 Brightspire Capital are associated (or correlated) with Ascendas India. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascendas India Trust has no effect on the direction of Brightspire Capital i.e., Brightspire Capital and Ascendas India go up and down completely randomly.

Pair Corralation between Brightspire Capital and Ascendas India

Given the investment horizon of 90 days Brightspire Capital is expected to generate 0.53 times more return on investment than Ascendas India. However, Brightspire Capital is 1.9 times less risky than Ascendas India. It trades about 0.02 of its potential returns per unit of risk. Ascendas India Trust is currently generating about -0.01 per unit of risk. If you would invest  611.00  in Brightspire Capital on December 3, 2024 and sell it today you would earn a total of  9.00  from holding Brightspire Capital or generate 1.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	78.69%
Values	Daily Returns

Brightspire Capital  vs.  Ascendas India Trust

Brightspire Capital

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Brightspire Capital are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Brightspire Capital is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Ascendas India Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ascendas India Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Ascendas India is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Brightspire Capital and Ascendas India

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

The idea behind Brightspire Capital and Ascendas India Trust 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.