Correlation Between BurTech Acquisition and Integral Acquisition
Can any of the company-specific risk be diversified away by investing in both BurTech Acquisition and Integral Acquisition 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 Integral Acquisition 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 Integral Acquisition, you can compare the effects of market volatilities on BurTech Acquisition and Integral Acquisition 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 Integral Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of BurTech Acquisition and Integral Acquisition.
Diversification Opportunities for BurTech Acquisition and Integral Acquisition
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BurTech and Integral is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding BurTech Acquisition Corp and Integral Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integral Acquisition 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 Integral Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integral Acquisition has no effect on the direction of BurTech Acquisition i.e., BurTech Acquisition and Integral Acquisition go up and down completely randomly.
Pair Corralation between BurTech Acquisition and Integral Acquisition
Assuming the 90 days horizon BurTech Acquisition is expected to generate 3.69 times less return on investment than Integral Acquisition. But when comparing it to its historical volatility, BurTech Acquisition Corp is 2.49 times less risky than Integral Acquisition. It trades about 0.1 of its potential returns per unit of risk. Integral Acquisition is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 7.45 in Integral Acquisition on August 30, 2024 and sell it today you would lose (7.41) from holding Integral Acquisition or give up 99.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 59.43% |
| Values | Daily Returns |
BurTech Acquisition Corp vs. Integral Acquisition
Performance |
| Timeline |
| BurTech Acquisition Corp |
| Integral Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
BurTech Acquisition and Integral Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BurTech Acquisition and Integral Acquisition
The main advantage of trading using opposite BurTech Acquisition and Integral Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BurTech Acquisition position performs unexpectedly, Integral Acquisition 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 Integral Acquisition will offset losses from the drop in Integral Acquisition's long position.The idea behind BurTech Acquisition Corp and Integral Acquisition pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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