Correlation Between Brightspire Capital and Generation Income

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

By analyzing existing cross correlation between Brightspire Capital and Generation Income Properties, you can compare the effects of market volatilities on Brightspire Capital and Generation Income 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 Generation Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brightspire Capital and Generation Income.

Diversification Opportunities for Brightspire Capital and Generation Income

-0.31

Correlation Coefficient

Brightspire Capital  Generation Income

Very good diversification

The 3 months correlation between Brightspire and Generation is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Brightspire Capital and Generation Income Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Generation Income 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 Generation Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Generation Income has no effect on the direction of Brightspire Capital i.e., Brightspire Capital and Generation Income go up and down completely randomly.

Pair Corralation between Brightspire Capital and Generation Income

If you would invest  571.00  in Brightspire Capital on September 3, 2024 and sell it today you would earn a total of  63.00  from holding Brightspire Capital or generate 11.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Brightspire Capital  vs.  Generation Income Properties

Brightspire Capital

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Brightspire Capital are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, Brightspire Capital may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Generation Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Generation Income Properties has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Generation Income is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Brightspire Capital and Generation Income

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

The idea behind Brightspire Capital and Generation Income Properties 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.