Correlation Between Elite Pharma and BrightSpring Health

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

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

Diversification Opportunities for Elite Pharma and BrightSpring Health

0.0

Correlation Coefficient

Elite Pharma  BrightSpring Health

Pay attention - limited upside

The 3 months correlation between Elite and BrightSpring is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Elite Pharma and BrightSpring Health Services, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BrightSpring Health and Elite Pharma 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 Elite Pharma 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 Elite Pharma i.e., Elite Pharma and BrightSpring Health go up and down completely randomly.

Pair Corralation between Elite Pharma and BrightSpring Health

If you would invest  6,180  in BrightSpring Health Services, on December 31, 2024 and sell it today you would earn a total of  373.00  from holding BrightSpring Health Services, or generate 6.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Elite Pharma  vs.  BrightSpring Health Services,

Elite Pharma

Risk-Adjusted Performance

Very Weak

Over the last 90 days Elite Pharma has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Elite Pharma is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

BrightSpring Health

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BrightSpring Health Services, are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, BrightSpring Health may actually be approaching a critical reversion point that can send shares even higher in May 2025.

Pair Trading with Elite Pharma and BrightSpring Health

The main advantage of trading using opposite Elite Pharma and BrightSpring Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elite Pharma 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 Elite Pharma 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.

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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.