Correlation Between Brightsphere Investment and CITGO

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Brightsphere Investment and CITGO 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 Brightsphere Investment and CITGO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brightsphere Investment Group and CITGO Petroleum 7, you can compare the effects of market volatilities on Brightsphere Investment and CITGO 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 Brightsphere Investment with a short position of CITGO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brightsphere Investment and CITGO.

Diversification Opportunities for Brightsphere Investment and CITGO

0.25
  Correlation Coefficient

Modest diversification

The 3 months correlation between Brightsphere and CITGO is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Brightsphere Investment Group and CITGO Petroleum 7 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITGO Petroleum 7 and Brightsphere Investment 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 Brightsphere Investment Group are associated (or correlated) with CITGO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITGO Petroleum 7 has no effect on the direction of Brightsphere Investment i.e., Brightsphere Investment and CITGO go up and down completely randomly.

Pair Corralation between Brightsphere Investment and CITGO

Given the investment horizon of 90 days Brightsphere Investment Group is expected to generate 11.79 times more return on investment than CITGO. However, Brightsphere Investment is 11.79 times more volatile than CITGO Petroleum 7. It trades about 0.04 of its potential returns per unit of risk. CITGO Petroleum 7 is currently generating about -0.01 per unit of risk. If you would invest  2,588  in Brightsphere Investment Group on September 24, 2024 and sell it today you would earn a total of  113.00  from holding Brightsphere Investment Group or generate 4.37% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy69.23%
ValuesDaily Returns

Brightsphere Investment Group  vs.  CITGO Petroleum 7

 Performance 
       Timeline  
Brightsphere Investment 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Brightsphere Investment Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable forward indicators, Brightsphere Investment is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
CITGO Petroleum 7 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days CITGO Petroleum 7 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, CITGO is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Brightsphere Investment and CITGO Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Brightsphere Investment and CITGO

The main advantage of trading using opposite Brightsphere Investment and CITGO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brightsphere Investment position performs unexpectedly, CITGO 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 CITGO will offset losses from the drop in CITGO's long position.
The idea behind Brightsphere Investment Group and CITGO Petroleum 7 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.
Check out your portfolio center.
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.

Other Complementary Tools

ETFs
Find actively traded Exchange Traded Funds (ETF) from around the world
Watchlist Optimization
Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Global Correlations
Find global opportunities by holding instruments from different markets