Correlation Between BurTech Acquisition and Capital One
Can any of the company-specific risk be diversified away by investing in both BurTech Acquisition and Capital One 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 One 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 One Financial, you can compare the effects of market volatilities on BurTech Acquisition and Capital One 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 One. Check out your portfolio center. Please also check ongoing floating volatility patterns of BurTech Acquisition and Capital One.
Diversification Opportunities for BurTech Acquisition and Capital One
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BurTech and Capital is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding BurTech Acquisition Corp and Capital One Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital One Financial 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 One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital One Financial has no effect on the direction of BurTech Acquisition i.e., BurTech Acquisition and Capital One go up and down completely randomly.
Pair Corralation between BurTech Acquisition and Capital One
Assuming the 90 days horizon BurTech Acquisition Corp is expected to generate 3.18 times more return on investment than Capital One. However, BurTech Acquisition is 3.18 times more volatile than Capital One Financial. It trades about 0.08 of its potential returns per unit of risk. Capital One Financial is currently generating about 0.21 per unit of risk. If you would invest 20.00 in BurTech Acquisition Corp on August 30, 2024 and sell it today you would earn a total of 3.00 from holding BurTech Acquisition Corp or generate 15.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BurTech Acquisition Corp vs. Capital One Financial
Performance |
| Timeline |
| BurTech Acquisition Corp |
| Capital One Financial |
BurTech Acquisition and Capital One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BurTech Acquisition and Capital One
The main advantage of trading using opposite BurTech Acquisition and Capital One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BurTech Acquisition position performs unexpectedly, Capital One 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 One will offset losses from the drop in Capital One's long position.| BurTech Acquisition vs. ClimateRock Class A | BurTech Acquisition vs. CF Acquisition VII | BurTech Acquisition vs. DP Cap Acquisition |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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