Correlation Between Everest and BurTech Acquisition

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Can any of the company-specific risk be diversified away by investing in both Everest and BurTech 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 Everest and BurTech Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Everest Group and BurTech Acquisition Corp, you can compare the effects of market volatilities on Everest and BurTech 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 Everest with a short position of BurTech Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Everest and BurTech Acquisition.

Diversification Opportunities for Everest and BurTech Acquisition

-0.38
  Correlation Coefficient

Very good diversification

The 3 months correlation between Everest and BurTech is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Everest Group and BurTech Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BurTech Acquisition Corp and Everest 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 Everest Group are associated (or correlated) with BurTech Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BurTech Acquisition Corp has no effect on the direction of Everest i.e., Everest and BurTech Acquisition go up and down completely randomly.

Pair Corralation between Everest and BurTech Acquisition

Allowing for the 90-day total investment horizon Everest Group is expected to generate 6.46 times more return on investment than BurTech Acquisition. However, Everest is 6.46 times more volatile than BurTech Acquisition Corp. It trades about 0.33 of its potential returns per unit of risk. BurTech Acquisition Corp is currently generating about 0.19 per unit of risk. If you would invest  35,561  in Everest Group on September 1, 2024 and sell it today you would earn a total of  3,195  from holding Everest Group or generate 8.98% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Everest Group  vs.  BurTech Acquisition Corp

 Performance 
       Timeline  
Everest Group 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Everest Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Everest is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.
BurTech Acquisition Corp 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in BurTech Acquisition Corp are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward-looking signals, BurTech Acquisition is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Everest and BurTech Acquisition Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Everest and BurTech Acquisition

The main advantage of trading using opposite Everest and BurTech Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Everest position performs unexpectedly, BurTech 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 BurTech Acquisition will offset losses from the drop in BurTech Acquisition's long position.
The idea behind Everest Group and BurTech Acquisition Corp 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.
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.

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