Correlation Between BrightView Holdings and Aeries Technology

Can any of the company-specific risk be diversified away by investing in both BrightView Holdings and Aeries Technology 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 BrightView Holdings and Aeries Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BrightView Holdings and Aeries Technology, you can compare the effects of market volatilities on BrightView Holdings and Aeries Technology 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 BrightView Holdings with a short position of Aeries Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of BrightView Holdings and Aeries Technology.

Diversification Opportunities for BrightView Holdings and Aeries Technology

0.08

Correlation Coefficient

BrightView Holdings  Aeries Technology

Significant diversification

The 3 months correlation between BrightView and Aeries is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding BrightView Holdings and Aeries Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeries Technology and BrightView Holdings 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 BrightView Holdings are associated (or correlated) with Aeries Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeries Technology has no effect on the direction of BrightView Holdings i.e., BrightView Holdings and Aeries Technology go up and down completely randomly.

Pair Corralation between BrightView Holdings and Aeries Technology

Allowing for the 90-day total investment horizon BrightView Holdings is expected to generate 43.28 times less return on investment than Aeries Technology. But when comparing it to its historical volatility, BrightView Holdings is 9.23 times less risky than Aeries Technology. It trades about 0.02 of its potential returns per unit of risk. Aeries Technology is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  77.00  in Aeries Technology on October 22, 2024 and sell it today you would earn a total of  7.00  from holding Aeries Technology or generate 9.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

BrightView Holdings  vs.  Aeries Technology

BrightView Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

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

Aeries Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aeries Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with BrightView Holdings and Aeries Technology

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

The idea behind BrightView Holdings and Aeries Technology 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.