Correlation Between MYT Netherlands and BrightSpring Health

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

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

Diversification Opportunities for MYT Netherlands and BrightSpring Health

0.54

Correlation Coefficient

MYT Netherlands  BrightSpring Health

Very weak diversification

The 3 months correlation between MYT and BrightSpring is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding MYT Netherlands Parent and BrightSpring Health Services, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BrightSpring Health and MYT Netherlands 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 MYT Netherlands Parent 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 MYT Netherlands i.e., MYT Netherlands and BrightSpring Health go up and down completely randomly.

Pair Corralation between MYT Netherlands and BrightSpring Health

Given the investment horizon of 90 days MYT Netherlands Parent is expected to generate 1.79 times more return on investment than BrightSpring Health. However, MYT Netherlands is 1.79 times more volatile than BrightSpring Health Services,. It trades about 0.07 of its potential returns per unit of risk. BrightSpring Health Services, is currently generating about 0.04 per unit of risk. If you would invest  687.00  in MYT Netherlands Parent on December 21, 2024 and sell it today you would earn a total of  112.00  from holding MYT Netherlands Parent or generate 16.3% return on investment over 90 days.

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

MYT Netherlands Parent  vs.  BrightSpring Health Services,

MYT Netherlands Parent

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in MYT Netherlands Parent are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal basic indicators, MYT Netherlands exhibited solid returns over the last few months and may actually be approaching a breakup point.

BrightSpring Health

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BrightSpring Health Services, are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, BrightSpring Health is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with MYT Netherlands and BrightSpring Health

The main advantage of trading using opposite MYT Netherlands and BrightSpring Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MYT Netherlands 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 MYT Netherlands Parent 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.