Correlation Between Indutrade and Burford Capital
Can any of the company-specific risk be diversified away by investing in both Indutrade and Burford Capital 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 Indutrade and Burford Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indutrade AB and Burford Capital Limited, you can compare the effects of market volatilities on Indutrade and Burford Capital 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 Indutrade with a short position of Burford Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indutrade and Burford Capital.
Diversification Opportunities for Indutrade and Burford Capital
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Indutrade and Burford is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Indutrade AB and Burford Capital Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burford Capital and Indutrade 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 Indutrade AB are associated (or correlated) with Burford Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burford Capital has no effect on the direction of Indutrade i.e., Indutrade and Burford Capital go up and down completely randomly.
Pair Corralation between Indutrade and Burford Capital
Assuming the 90 days trading horizon Indutrade AB is expected to under-perform the Burford Capital. But the stock apears to be less risky and, when comparing its historical volatility, Indutrade AB is 1.36 times less risky than Burford Capital. The stock trades about -0.14 of its potential returns per unit of risk. The Burford Capital Limited is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 103,500 in Burford Capital Limited on September 2, 2024 and sell it today you would earn a total of 2,600 from holding Burford Capital Limited or generate 2.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indutrade AB vs. Burford Capital Limited
Performance |
| Timeline |
| Indutrade AB |
| Burford Capital |
Indutrade and Burford Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indutrade and Burford Capital
The main advantage of trading using opposite Indutrade and Burford Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indutrade position performs unexpectedly, Burford Capital 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 Burford Capital will offset losses from the drop in Burford Capital's long position.| Indutrade vs. Uniper SE | Indutrade vs. Mulberry Group PLC | Indutrade vs. London Security Plc | Indutrade vs. Triad Group PLC |
| Burford Capital vs. Catalyst Media Group | Burford Capital vs. Catena Media PLC | Burford Capital vs. Hollywood Bowl Group | Burford Capital vs. Indutrade AB |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |