Correlation Between Nutanix and Burnham Holdings
Can any of the company-specific risk be diversified away by investing in both Nutanix 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 Nutanix and Burnham Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nutanix and Burnham Holdings, you can compare the effects of market volatilities on Nutanix 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 Nutanix with a short position of Burnham Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nutanix and Burnham Holdings.
Diversification Opportunities for Nutanix and Burnham Holdings
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nutanix and Burnham is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Nutanix and Burnham Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burnham Holdings and Nutanix 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 Nutanix 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 Nutanix i.e., Nutanix and Burnham Holdings go up and down completely randomly.
Pair Corralation between Nutanix and Burnham Holdings
Given the investment horizon of 90 days Nutanix is expected to generate 0.98 times more return on investment than Burnham Holdings. However, Nutanix is 1.02 times less risky than Burnham Holdings. It trades about 0.35 of its potential returns per unit of risk. Burnham Holdings is currently generating about 0.05 per unit of risk. If you would invest 6,202 in Nutanix on August 25, 2024 and sell it today you would earn a total of 1,116 from holding Nutanix or generate 17.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nutanix vs. Burnham Holdings
Performance |
| Timeline |
| Nutanix |
| Burnham Holdings |
Nutanix and Burnham Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nutanix and Burnham Holdings
The main advantage of trading using opposite Nutanix and Burnham Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nutanix 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.| Nutanix vs. Palo Alto Networks | Nutanix vs. Uipath Inc | Nutanix vs. Zscaler | Nutanix vs. Crowdstrike Holdings |
| Burnham Holdings vs. Travis Perkins PLC | Burnham Holdings vs. Armstrong World Industries | Burnham Holdings vs. Apogee Enterprises |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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