Correlation Between BrightSpring Health and CardioComm Solutions

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

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

Diversification Opportunities for BrightSpring Health and CardioComm Solutions

0.44

Correlation Coefficient

BrightSpring Health  CardioComm Solutions

Very weak diversification

The 3 months correlation between BrightSpring and CardioComm is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding BrightSpring Health Services, and CardioComm Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CardioComm Solutions and BrightSpring Health 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 BrightSpring Health Services, are associated (or correlated) with CardioComm Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CardioComm Solutions has no effect on the direction of BrightSpring Health i.e., BrightSpring Health and CardioComm Solutions go up and down completely randomly.

Pair Corralation between BrightSpring Health and CardioComm Solutions

Given the investment horizon of 90 days BrightSpring Health Services, is expected to under-perform the CardioComm Solutions. But the stock apears to be less risky and, when comparing its historical volatility, BrightSpring Health Services, is 8.31 times less risky than CardioComm Solutions. The stock trades about -0.07 of its potential returns per unit of risk. The CardioComm Solutions is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1.02  in CardioComm Solutions on May 13, 2025 and sell it today you would lose (0.31) from holding CardioComm Solutions or give up 30.39% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.88%
Values	Daily Returns

BrightSpring Health Services,  vs.  CardioComm Solutions

BrightSpring Health

Risk-Adjusted Performance

Weakest

Over the last 90 days BrightSpring Health Services, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

CardioComm Solutions

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in CardioComm Solutions are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, CardioComm Solutions reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BrightSpring Health and CardioComm Solutions

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

The idea behind BrightSpring Health Services, and CardioComm Solutions 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.