Correlation Between BurTech Acquisition and PRA
Can any of the company-specific risk be diversified away by investing in both BurTech Acquisition and PRA 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 PRA 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 PRA Group, you can compare the effects of market volatilities on BurTech Acquisition and PRA 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 PRA. Check out your portfolio center. Please also check ongoing floating volatility patterns of BurTech Acquisition and PRA.
Diversification Opportunities for BurTech Acquisition and PRA
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BurTech and PRA is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding BurTech Acquisition Corp and PRA Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PRA Group 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 PRA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PRA Group has no effect on the direction of BurTech Acquisition i.e., BurTech Acquisition and PRA go up and down completely randomly.
Pair Corralation between BurTech Acquisition and PRA
Assuming the 90 days horizon BurTech Acquisition Corp is expected to generate 2.78 times more return on investment than PRA. However, BurTech Acquisition is 2.78 times more volatile than PRA Group. It trades about 0.08 of its potential returns per unit of risk. PRA Group is currently generating about -0.01 per unit of risk. If you would invest 20.00 in BurTech Acquisition Corp on August 26, 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BurTech Acquisition Corp vs. PRA Group
Performance |
| Timeline |
| BurTech Acquisition Corp |
| PRA Group |
BurTech Acquisition and PRA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BurTech Acquisition and PRA
The main advantage of trading using opposite BurTech Acquisition and PRA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BurTech Acquisition position performs unexpectedly, PRA 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 PRA will offset losses from the drop in PRA's long position.| BurTech Acquisition vs. PowerUp Acquisition Corp | BurTech Acquisition vs. Aurora Innovation | BurTech Acquisition vs. HUMANA INC | BurTech Acquisition vs. Aquagold International |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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