Correlation Between Frp Holdings and Brightspire Capital

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

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

Diversification Opportunities for Frp Holdings and Brightspire Capital

0.11

Correlation Coefficient

Frp Holdings  Brightspire Capital

Average diversification

The 3 months correlation between Frp and Brightspire is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Frp Holdings Ord and Brightspire Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brightspire Capital and Frp 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 Frp Holdings Ord are associated (or correlated) with Brightspire Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brightspire Capital has no effect on the direction of Frp Holdings i.e., Frp Holdings and Brightspire Capital go up and down completely randomly.

Pair Corralation between Frp Holdings and Brightspire Capital

Given the investment horizon of 90 days Frp Holdings Ord is expected to under-perform the Brightspire Capital. In addition to that, Frp Holdings is 1.05 times more volatile than Brightspire Capital. It trades about -0.05 of its total potential returns per unit of risk. Brightspire Capital is currently generating about 0.03 per unit of volatility. If you would invest  558.00  in Brightspire Capital on December 29, 2024 and sell it today you would earn a total of  10.00  from holding Brightspire Capital or generate 1.79% return on investment over 90 days.

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

Frp Holdings Ord  vs.  Brightspire Capital

Frp Holdings Ord

Risk-Adjusted Performance

Very Weak

Over the last 90 days Frp Holdings Ord has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Frp Holdings is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Brightspire Capital

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Brightspire Capital are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Brightspire Capital is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Frp Holdings and Brightspire Capital

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

The idea behind Frp Holdings Ord and Brightspire Capital 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.