Correlation Between Marcus Millichap and Brightspire Capital

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

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

Diversification Opportunities for Marcus Millichap and Brightspire Capital

0.32

Correlation Coefficient

Marcus Millichap  Brightspire Capital

Weak diversification

The 3 months correlation between Marcus and Brightspire is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Marcus Millichap and Brightspire Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brightspire Capital and Marcus Millichap 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 Marcus Millichap 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 Marcus Millichap i.e., Marcus Millichap and Brightspire Capital go up and down completely randomly.

Pair Corralation between Marcus Millichap and Brightspire Capital

Considering the 90-day investment horizon Marcus Millichap is expected to under-perform the Brightspire Capital. In addition to that, Marcus Millichap is 1.47 times more volatile than Brightspire Capital. It trades about -0.06 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 30, 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	Very Weak
Accuracy	100.0%
Values	Daily Returns

Marcus Millichap  vs.  Brightspire Capital

Marcus Millichap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Marcus Millichap has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's primary indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm 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 Marcus Millichap and Brightspire Capital

The main advantage of trading using opposite Marcus Millichap and Brightspire Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marcus Millichap 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 Marcus Millichap 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.