Correlation Between BurTech Acquisition and Capital Southwest
Can any of the company-specific risk be diversified away by investing in both BurTech Acquisition and Capital Southwest 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 Capital Southwest 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 Capital Southwest, you can compare the effects of market volatilities on BurTech Acquisition and Capital Southwest 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 Capital Southwest. Check out your portfolio center. Please also check ongoing floating volatility patterns of BurTech Acquisition and Capital Southwest.
Diversification Opportunities for BurTech Acquisition and Capital Southwest
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BurTech and Capital is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding BurTech Acquisition Corp and Capital Southwest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Southwest 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 Capital Southwest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Southwest has no effect on the direction of BurTech Acquisition i.e., BurTech Acquisition and Capital Southwest go up and down completely randomly.
Pair Corralation between BurTech Acquisition and Capital Southwest
Assuming the 90 days horizon BurTech Acquisition Corp is expected to generate 0.94 times more return on investment than Capital Southwest. However, BurTech Acquisition Corp is 1.06 times less risky than Capital Southwest. It trades about 0.06 of its potential returns per unit of risk. Capital Southwest is currently generating about 0.01 per unit of risk. If you would invest 1,144 in BurTech Acquisition Corp on August 27, 2024 and sell it today you would earn a total of 5.00 from holding BurTech Acquisition Corp or generate 0.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BurTech Acquisition Corp vs. Capital Southwest
Performance |
| Timeline |
| BurTech Acquisition Corp |
| Capital Southwest |
BurTech Acquisition and Capital Southwest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BurTech Acquisition and Capital Southwest
The main advantage of trading using opposite BurTech Acquisition and Capital Southwest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BurTech Acquisition position performs unexpectedly, Capital Southwest 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 Capital Southwest will offset losses from the drop in Capital Southwest's long position.| BurTech Acquisition vs. PowerUp Acquisition Corp | BurTech Acquisition vs. Aurora Innovation | BurTech Acquisition vs. HUMANA INC | BurTech Acquisition vs. Aquagold International |
| Capital Southwest vs. Marine Products | Capital Southwest vs. Helmerich and Payne | Capital Southwest vs. Sonos Inc | Capital Southwest vs. National Beverage Corp |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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