Correlation Between Brightsphere Investment and SOUTHERN

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

Diversification Opportunities for Brightsphere Investment and SOUTHERN

-0.48
  Correlation Coefficient

Very good diversification

The 3 months correlation between Brightsphere and SOUTHERN is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Brightsphere Investment Group and SOUTHERN PER CORP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOUTHERN PER P 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 SOUTHERN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOUTHERN PER P has no effect on the direction of Brightsphere Investment i.e., Brightsphere Investment and SOUTHERN go up and down completely randomly.

Pair Corralation between Brightsphere Investment and SOUTHERN

Given the investment horizon of 90 days Brightsphere Investment Group is expected to generate 1.86 times more return on investment than SOUTHERN. However, Brightsphere Investment is 1.86 times more volatile than SOUTHERN PER CORP. It trades about 0.09 of its potential returns per unit of risk. SOUTHERN PER CORP is currently generating about -0.01 per unit of risk. If you would invest  1,877  in Brightsphere Investment Group on September 25, 2024 and sell it today you would earn a total of  786.00  from holding Brightsphere Investment Group or generate 41.88% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy97.18%
ValuesDaily Returns

Brightsphere Investment Group  vs.  SOUTHERN PER CORP

 Performance 
       Timeline  
Brightsphere Investment 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Brightsphere Investment Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. 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.
SOUTHERN PER P 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days SOUTHERN PER CORP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, SOUTHERN is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Brightsphere Investment and SOUTHERN Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Brightsphere Investment and SOUTHERN

The main advantage of trading using opposite Brightsphere Investment and SOUTHERN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brightsphere Investment position performs unexpectedly, SOUTHERN 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 SOUTHERN will offset losses from the drop in SOUTHERN's long position.
The idea behind Brightsphere Investment Group and SOUTHERN PER 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.
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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

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