Correlation Between BurTech Acquisition and Compass Digital
Can any of the company-specific risk be diversified away by investing in both BurTech Acquisition and Compass Digital 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 BurTech Acquisition and Compass Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BurTech Acquisition Corp and Compass Digital Acquisition, you can compare the effects of market volatilities on BurTech Acquisition and Compass Digital 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 BurTech Acquisition with a short position of Compass Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of BurTech Acquisition and Compass Digital.
Diversification Opportunities for BurTech Acquisition and Compass Digital
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between BurTech and Compass is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding BurTech Acquisition Corp and Compass Digital Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compass Digital Acqu and BurTech Acquisition 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 BurTech Acquisition Corp are associated (or correlated) with Compass Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compass Digital Acqu has no effect on the direction of BurTech Acquisition i.e., BurTech Acquisition and Compass Digital go up and down completely randomly.
Pair Corralation between BurTech Acquisition and Compass Digital
Given the investment horizon of 90 days BurTech Acquisition Corp is expected to generate 0.37 times more return on investment than Compass Digital. However, BurTech Acquisition Corp is 2.71 times less risky than Compass Digital. It trades about 0.09 of its potential returns per unit of risk. Compass Digital Acquisition is currently generating about 0.02 per unit of risk. If you would invest 1,047 in BurTech Acquisition Corp on August 26, 2024 and sell it today you would earn a total of 94.00 from holding BurTech Acquisition Corp or generate 8.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 93.99% |
| Values | Daily Returns |
BurTech Acquisition Corp vs. Compass Digital Acquisition
Performance |
| Timeline |
| BurTech Acquisition Corp |
| Compass Digital Acqu |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
BurTech Acquisition and Compass Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BurTech Acquisition and Compass Digital
The main advantage of trading using opposite BurTech Acquisition and Compass Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BurTech Acquisition position performs unexpectedly, Compass Digital 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 Compass Digital will offset losses from the drop in Compass Digital's long position.| BurTech Acquisition vs. Swiftmerge Acquisition Corp | BurTech Acquisition vs. CF Acquisition VII | BurTech Acquisition vs. Portage Fintech Acquisition | BurTech Acquisition vs. ClimateRock Class A |
| Compass Digital vs. AlphaVest Acquisition Corp | Compass Digital vs. Alpha One | Compass Digital vs. Manaris Corp | Compass Digital vs. ClimateRock Class A |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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