Correlation Between Brightsphere Investment and Altisource Asset

Can any of the company-specific risk be diversified away by investing in both Brightsphere Investment and Altisource Asset 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 Brightsphere Investment and Altisource Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Brightsphere Investment Group and Altisource Asset Management, you can compare the effects of market volatilities on Brightsphere Investment and Altisource Asset 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 Brightsphere Investment with a short position of Altisource Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brightsphere Investment and Altisource Asset.

Diversification Opportunities for Brightsphere Investment and Altisource Asset

0.28

Correlation Coefficient

Brightsphere Investment  Altisource Asset

Modest diversification

The 3 months correlation between Brightsphere and Altisource is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Brightsphere Investment Group and Altisource Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altisource Asset Man and Brightsphere Investment 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 Brightsphere Investment Group are associated (or correlated) with Altisource Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altisource Asset Man has no effect on the direction of Brightsphere Investment i.e., Brightsphere Investment and Altisource Asset go up and down completely randomly.

Pair Corralation between Brightsphere Investment and Altisource Asset

If you would invest  2,618  in Brightsphere Investment Group on October 22, 2024 and sell it today you would earn a total of  16.00  from holding Brightsphere Investment Group or generate 0.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	2.0%
Values	Daily Returns

Brightsphere Investment Group  vs.  Altisource Asset Management

Brightsphere Investment

Risk-Adjusted Performance

0 of 100

Weak

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

Altisource Asset Man

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Altisource Asset Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Altisource Asset is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Brightsphere Investment and Altisource Asset

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

The idea behind Brightsphere Investment Group and Altisource Asset Management 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.