Correlation Between Brightsphere Investment and SuRo Capital

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Can any of the company-specific risk be diversified away by investing in both Brightsphere Investment and SuRo Capital 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 SuRo Capital 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 SuRo Capital Corp, you can compare the effects of market volatilities on Brightsphere Investment and SuRo Capital 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 SuRo Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brightsphere Investment and SuRo Capital.

Diversification Opportunities for Brightsphere Investment and SuRo Capital

0.84
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Brightsphere and SuRo is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Brightsphere Investment Group and SuRo Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SuRo Capital Corp 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 SuRo Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SuRo Capital Corp has no effect on the direction of Brightsphere Investment i.e., Brightsphere Investment and SuRo Capital go up and down completely randomly.

Pair Corralation between Brightsphere Investment and SuRo Capital

Given the investment horizon of 90 days Brightsphere Investment is expected to generate 14.55 times less return on investment than SuRo Capital. But when comparing it to its historical volatility, Brightsphere Investment Group is 3.07 times less risky than SuRo Capital. It trades about 0.09 of its potential returns per unit of risk. SuRo Capital Corp is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest  503.00  in SuRo Capital Corp on September 15, 2024 and sell it today you would earn a total of  131.00  from holding SuRo Capital Corp or generate 26.04% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Brightsphere Investment Group  vs.  SuRo Capital Corp

 Performance 
       Timeline  
Brightsphere Investment 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Brightsphere Investment Group are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal forward indicators, Brightsphere Investment reported solid returns over the last few months and may actually be approaching a breakup point.
SuRo Capital Corp 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in SuRo Capital Corp are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, SuRo Capital unveiled solid returns over the last few months and may actually be approaching a breakup point.

Brightsphere Investment and SuRo Capital Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Brightsphere Investment and SuRo Capital

The main advantage of trading using opposite Brightsphere Investment and SuRo Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brightsphere Investment position performs unexpectedly, SuRo Capital 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 SuRo Capital will offset losses from the drop in SuRo Capital's long position.
The idea behind Brightsphere Investment Group and SuRo Capital Corp 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.
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..

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