Correlation Between Burke Herbert and Main Street
Can any of the company-specific risk be diversified away by investing in both Burke Herbert and Main Street 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 Burke Herbert and Main Street into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Burke Herbert Financial and Main Street Financial, you can compare the effects of market volatilities on Burke Herbert and Main Street 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 Burke Herbert with a short position of Main Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burke Herbert and Main Street.
Diversification Opportunities for Burke Herbert and Main Street
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Burke and Main is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Burke Herbert Financial and Main Street Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Main Street Financial and Burke Herbert 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 Burke Herbert Financial are associated (or correlated) with Main Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Main Street Financial has no effect on the direction of Burke Herbert i.e., Burke Herbert and Main Street go up and down completely randomly.
Pair Corralation between Burke Herbert and Main Street
Given the investment horizon of 90 days Burke Herbert Financial is expected to generate 1.08 times more return on investment than Main Street. However, Burke Herbert is 1.08 times more volatile than Main Street Financial. It trades about 0.01 of its potential returns per unit of risk. Main Street Financial is currently generating about 0.0 per unit of risk. If you would invest 6,784 in Burke Herbert Financial on August 29, 2024 and sell it today you would earn a total of 108.00 from holding Burke Herbert Financial or generate 1.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Burke Herbert Financial vs. Main Street Financial
Performance |
| Timeline |
| Burke Herbert Financial |
| Main Street Financial |
Burke Herbert and Main Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Burke Herbert and Main Street
The main advantage of trading using opposite Burke Herbert and Main Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burke Herbert position performs unexpectedly, Main Street 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 Main Street will offset losses from the drop in Main Street's long position.| Burke Herbert vs. Private Bancorp of | Burke Herbert vs. Avidbank Holdings | Burke Herbert vs. American Business Bk | Burke Herbert vs. Home Federal Bancorp |
| Main Street vs. Israel Discount Bank | Main Street vs. Baraboo Bancorporation | Main Street vs. Danske Bank AS | Main Street vs. Jyske Bank AS |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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