Correlation Between Burnham Holdings and Travis Perkins
Can any of the company-specific risk be diversified away by investing in both Burnham Holdings and Travis Perkins 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 Burnham Holdings and Travis Perkins into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Burnham Holdings and Travis Perkins Plc, you can compare the effects of market volatilities on Burnham Holdings and Travis Perkins 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 Burnham Holdings with a short position of Travis Perkins. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burnham Holdings and Travis Perkins.
Diversification Opportunities for Burnham Holdings and Travis Perkins
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Burnham and Travis is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Burnham Holdings and Travis Perkins Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Travis Perkins Plc and Burnham Holdings 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 Burnham Holdings are associated (or correlated) with Travis Perkins. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Travis Perkins Plc has no effect on the direction of Burnham Holdings i.e., Burnham Holdings and Travis Perkins go up and down completely randomly.
Pair Corralation between Burnham Holdings and Travis Perkins
Assuming the 90 days horizon Burnham Holdings is expected to generate 2.94 times more return on investment than Travis Perkins. However, Burnham Holdings is 2.94 times more volatile than Travis Perkins Plc. It trades about 0.04 of its potential returns per unit of risk. Travis Perkins Plc is currently generating about -0.06 per unit of risk. If you would invest 1,122 in Burnham Holdings on August 26, 2024 and sell it today you would earn a total of 317.00 from holding Burnham Holdings or generate 28.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 82.6% |
| Values | Daily Returns |
Burnham Holdings vs. Travis Perkins Plc
Performance |
| Timeline |
| Burnham Holdings |
| Travis Perkins Plc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Burnham Holdings and Travis Perkins Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Burnham Holdings and Travis Perkins
The main advantage of trading using opposite Burnham Holdings and Travis Perkins positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burnham Holdings position performs unexpectedly, Travis Perkins 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 Travis Perkins will offset losses from the drop in Travis Perkins' long position.| Burnham Holdings vs. Travis Perkins PLC | Burnham Holdings vs. Armstrong World Industries | Burnham Holdings vs. Apogee Enterprises |
| Travis Perkins vs. Atlas Engineered Products | Travis Perkins vs. Beacon Roofing Supply | Travis Perkins vs. Antelope Enterprise Holdings | Travis Perkins vs. Intelligent Living Application |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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