Correlation Between BurTech Acquisition and Compass Diversified
Can any of the company-specific risk be diversified away by investing in both BurTech Acquisition and Compass Diversified 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 Diversified 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 Diversified Holdings, you can compare the effects of market volatilities on BurTech Acquisition and Compass Diversified 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 Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of BurTech Acquisition and Compass Diversified.
Diversification Opportunities for BurTech Acquisition and Compass Diversified
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BurTech and Compass is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding BurTech Acquisition Corp and Compass Diversified Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compass Diversified 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 Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compass Diversified has no effect on the direction of BurTech Acquisition i.e., BurTech Acquisition and Compass Diversified go up and down completely randomly.
Pair Corralation between BurTech Acquisition and Compass Diversified
Assuming the 90 days horizon BurTech Acquisition Corp is expected to generate 36.68 times more return on investment than Compass Diversified. However, BurTech Acquisition is 36.68 times more volatile than Compass Diversified Holdings. It trades about 0.09 of its potential returns per unit of risk. Compass Diversified Holdings is currently generating about 0.04 per unit of risk. If you would invest 1.00 in BurTech Acquisition Corp on August 31, 2024 and sell it today you would earn a total of 21.00 from holding BurTech Acquisition Corp or generate 2100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.64% |
| Values | Daily Returns |
BurTech Acquisition Corp vs. Compass Diversified Holdings
Performance |
| Timeline |
| BurTech Acquisition Corp |
| Compass Diversified |
BurTech Acquisition and Compass Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BurTech Acquisition and Compass Diversified
The main advantage of trading using opposite BurTech Acquisition and Compass Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BurTech Acquisition position performs unexpectedly, Compass Diversified 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 Diversified will offset losses from the drop in Compass Diversified's long position.| BurTech Acquisition vs. PowerUp Acquisition Corp | BurTech Acquisition vs. HUMANA INC | BurTech Acquisition vs. Aquagold International | BurTech Acquisition vs. Barloworld Ltd ADR |
| Compass Diversified vs. Matthews International | Compass Diversified vs. Steel Partners Holdings | Compass Diversified vs. Valmont Industries | Compass Diversified vs. Brookfield Business Partners |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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