Correlation Between Brightcove and DHI

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Can any of the company-specific risk be diversified away by investing in both Brightcove and DHI 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 Brightcove and DHI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brightcove and DHI Group, you can compare the effects of market volatilities on Brightcove and DHI 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 Brightcove with a short position of DHI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brightcove and DHI.

Diversification Opportunities for Brightcove and DHI

BrightcoveDHIDiversified AwayBrightcoveDHIDiversified Away100%
0.14
  Correlation Coefficient

Average diversification

The 3 months correlation between Brightcove and DHI is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Brightcove and DHI Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DHI Group and Brightcove 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 Brightcove are associated (or correlated) with DHI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DHI Group has no effect on the direction of Brightcove i.e., Brightcove and DHI go up and down completely randomly.

Pair Corralation between Brightcove and DHI

Given the investment horizon of 90 days Brightcove is expected to generate 1.86 times more return on investment than DHI. However, Brightcove is 1.86 times more volatile than DHI Group. It trades about 0.23 of its potential returns per unit of risk. DHI Group is currently generating about 0.05 per unit of risk. If you would invest  206.00  in Brightcove on September 13, 2024 and sell it today you would earn a total of  230.00  from holding Brightcove or generate 111.65% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Brightcove  vs.  DHI Group

 Performance 
JavaScript chart by amCharts 3.21.15OctNov 020406080100
JavaScript chart by amCharts 3.21.15BCOV DHX
       Timeline  
Brightcove 

Risk-Adjusted Performance

18 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Brightcove are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Brightcove showed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec22.533.54
DHI Group 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in DHI Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical indicators, DHI may actually be approaching a critical reversion point that can send shares even higher in January 2025.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec1.551.61.651.71.751.81.851.9

Brightcove and DHI Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-16.78-12.57-8.35-4.140.07854.639.3514.0618.77 0.010.020.030.04
JavaScript chart by amCharts 3.21.15BCOV DHX
       Returns  

Pair Trading with Brightcove and DHI

The main advantage of trading using opposite Brightcove and DHI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brightcove position performs unexpectedly, DHI 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 DHI will offset losses from the drop in DHI's long position.
The idea behind Brightcove and DHI Group 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.

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