Correlation Between Dogwood Therapeutics, and BrightSpring Health

Can any of the company-specific risk be diversified away by investing in both Dogwood Therapeutics, and BrightSpring Health 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 Dogwood Therapeutics, and BrightSpring Health into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dogwood Therapeutics, and BrightSpring Health Services,, you can compare the effects of market volatilities on Dogwood Therapeutics, and BrightSpring Health 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 Dogwood Therapeutics, with a short position of BrightSpring Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dogwood Therapeutics, and BrightSpring Health.

Diversification Opportunities for Dogwood Therapeutics, and BrightSpring Health

-0.68

Correlation Coefficient

Dogwood Therapeutics,  BrightSpring Health

Excellent diversification

The 3 months correlation between Dogwood and BrightSpring is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Dogwood Therapeutics, and BrightSpring Health Services, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BrightSpring Health and Dogwood Therapeutics, 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 Dogwood Therapeutics, are associated (or correlated) with BrightSpring Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BrightSpring Health has no effect on the direction of Dogwood Therapeutics, i.e., Dogwood Therapeutics, and BrightSpring Health go up and down completely randomly.

Pair Corralation between Dogwood Therapeutics, and BrightSpring Health

Given the investment horizon of 90 days Dogwood Therapeutics, is expected to under-perform the BrightSpring Health. In addition to that, Dogwood Therapeutics, is 4.86 times more volatile than BrightSpring Health Services,. It trades about -0.02 of its total potential returns per unit of risk. BrightSpring Health Services, is currently generating about 0.26 per unit of volatility. If you would invest  4,817  in BrightSpring Health Services, on August 31, 2024 and sell it today you would earn a total of  2,098  from holding BrightSpring Health Services, or generate 43.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Dogwood Therapeutics,  vs.  BrightSpring Health Services,

Dogwood Therapeutics,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dogwood Therapeutics, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

BrightSpring Health

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in BrightSpring Health Services, are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical and fundamental indicators, BrightSpring Health unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dogwood Therapeutics, and BrightSpring Health

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

The idea behind Dogwood Therapeutics, and BrightSpring Health Services, 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.