Correlation Between BrightView Holdings and Exponent

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

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

Diversification Opportunities for BrightView Holdings and Exponent

-0.21

Correlation Coefficient

BrightView Holdings  Exponent

Very good diversification

The 3 months correlation between BrightView and Exponent is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding BrightView Holdings and Exponent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exponent and BrightView Holdings 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 BrightView Holdings are associated (or correlated) with Exponent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exponent has no effect on the direction of BrightView Holdings i.e., BrightView Holdings and Exponent go up and down completely randomly.

Pair Corralation between BrightView Holdings and Exponent

Allowing for the 90-day total investment horizon BrightView Holdings is expected to generate 1.39 times more return on investment than Exponent. However, BrightView Holdings is 1.39 times more volatile than Exponent. It trades about 0.04 of its potential returns per unit of risk. Exponent is currently generating about -0.17 per unit of risk. If you would invest  1,552  in BrightView Holdings on September 26, 2024 and sell it today you would earn a total of  59.00  from holding BrightView Holdings or generate 3.8% return on investment over 90 days.

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

BrightView Holdings  vs.  Exponent

BrightView Holdings

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BrightView Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, BrightView Holdings is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Exponent

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Exponent has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with BrightView Holdings and Exponent

The main advantage of trading using opposite BrightView Holdings and Exponent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BrightView Holdings position performs unexpectedly, Exponent 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 Exponent will offset losses from the drop in Exponent's long position.

The idea behind BrightView Holdings and Exponent 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.