Correlation Between Mesabi Trust and Burnham Holdings
Can any of the company-specific risk be diversified away by investing in both Mesabi Trust and Burnham Holdings 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 Mesabi Trust and Burnham Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mesabi Trust and Burnham Holdings, you can compare the effects of market volatilities on Mesabi Trust and Burnham Holdings 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 Mesabi Trust with a short position of Burnham Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesabi Trust and Burnham Holdings.
Diversification Opportunities for Mesabi Trust and Burnham Holdings
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mesabi and Burnham is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Mesabi Trust and Burnham Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burnham Holdings and Mesabi Trust 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 Mesabi Trust are associated (or correlated) with Burnham Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burnham Holdings has no effect on the direction of Mesabi Trust i.e., Mesabi Trust and Burnham Holdings go up and down completely randomly.
Pair Corralation between Mesabi Trust and Burnham Holdings
Considering the 90-day investment horizon Mesabi Trust is expected to generate 1.03 times more return on investment than Burnham Holdings. However, Mesabi Trust is 1.03 times more volatile than Burnham Holdings. It trades about 0.21 of its potential returns per unit of risk. Burnham Holdings is currently generating about -0.01 per unit of risk. If you would invest 2,453 in Mesabi Trust on August 29, 2024 and sell it today you would earn a total of 244.00 from holding Mesabi Trust or generate 9.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mesabi Trust vs. Burnham Holdings
Performance |
| Timeline |
| Mesabi Trust |
| Burnham Holdings |
Mesabi Trust and Burnham Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mesabi Trust and Burnham Holdings
The main advantage of trading using opposite Mesabi Trust and Burnham Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesabi Trust position performs unexpectedly, Burnham Holdings 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 Burnham Holdings will offset losses from the drop in Burnham Holdings' long position.| Mesabi Trust vs. Olympic Steel | Mesabi Trust vs. Universal Stainless Alloy | Mesabi Trust vs. POSCO Holdings | Mesabi Trust vs. Outokumpu Oyj ADR |
| Burnham Holdings vs. Deere Company | Burnham Holdings vs. Columbus McKinnon | Burnham Holdings vs. Hyster Yale Materials Handling | Burnham Holdings vs. Manitowoc |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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