Correlation Between Vaalco Energy and Brighthouse Financial

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

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

Diversification Opportunities for Vaalco Energy and Brighthouse Financial

-0.25

Correlation Coefficient

Vaalco Energy  Brighthouse Financial

Very good diversification

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

Pair Corralation between Vaalco Energy and Brighthouse Financial

Considering the 90-day investment horizon Vaalco Energy is expected to generate 1.18 times more return on investment than Brighthouse Financial. However, Vaalco Energy is 1.18 times more volatile than Brighthouse Financial. It trades about 0.07 of its potential returns per unit of risk. Brighthouse Financial is currently generating about -0.09 per unit of risk. If you would invest  325.00  in Vaalco Energy on May 6, 2025 and sell it today you would earn a total of  35.00  from holding Vaalco Energy or generate 10.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Vaalco Energy  vs.  Brighthouse Financial

Vaalco Energy

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Vaalco Energy are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Vaalco Energy showed solid returns over the last few months and may actually be approaching a breakup point.

Brighthouse Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Brighthouse Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Preferred Stock's basic indicators remain relatively invariable which may send shares a bit higher in September 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Vaalco Energy and Brighthouse Financial

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

The idea behind Vaalco Energy and Brighthouse Financial 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.