Correlation Between Venus Concept and BrightSpring Health

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

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

Diversification Opportunities for Venus Concept and BrightSpring Health

0.08

Correlation Coefficient

Venus Concept  BrightSpring Health

Significant diversification

The 3 months correlation between Venus and BrightSpring is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Venus Concept and BrightSpring Health Services, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BrightSpring Health and Venus Concept 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 Venus Concept 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 Venus Concept i.e., Venus Concept and BrightSpring Health go up and down completely randomly.

Pair Corralation between Venus Concept and BrightSpring Health

Given the investment horizon of 90 days Venus Concept is expected to generate 3.94 times more return on investment than BrightSpring Health. However, Venus Concept is 3.94 times more volatile than BrightSpring Health Services,. It trades about 0.04 of its potential returns per unit of risk. BrightSpring Health Services, is currently generating about 0.03 per unit of risk. If you would invest  353.00  in Venus Concept on December 21, 2024 and sell it today you would lose (43.00) from holding Venus Concept or give up 12.18% of portfolio value over 90 days.

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

Venus Concept  vs.  BrightSpring Health Services,

Venus Concept

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Venus Concept are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Venus Concept displayed 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. Despite nearly weak basic indicators, BrightSpring Health may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Venus Concept and BrightSpring Health

The main advantage of trading using opposite Venus Concept and BrightSpring Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Venus Concept 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 Venus Concept 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.