Correlation Between Western Union and Burnham Holdings
Can any of the company-specific risk be diversified away by investing in both Western Union 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 Western Union and Burnham Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Union Co and Burnham Holdings PFD, you can compare the effects of market volatilities on Western Union 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 Western Union with a short position of Burnham Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Union and Burnham Holdings.
Diversification Opportunities for Western Union and Burnham Holdings
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Western and Burnham is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Western Union Co and Burnham Holdings PFD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burnham Holdings PFD and Western Union 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 Western Union Co 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 PFD has no effect on the direction of Western Union i.e., Western Union and Burnham Holdings go up and down completely randomly.
Pair Corralation between Western Union and Burnham Holdings
Allowing for the 90-day total investment horizon Western Union Co is expected to under-perform the Burnham Holdings. In addition to that, Western Union is 5.46 times more volatile than Burnham Holdings PFD. It trades about 0.0 of its total potential returns per unit of risk. Burnham Holdings PFD is currently generating about 0.09 per unit of volatility. If you would invest 5,029 in Burnham Holdings PFD on September 14, 2024 and sell it today you would earn a total of 296.00 from holding Burnham Holdings PFD or generate 5.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Western Union Co vs. Burnham Holdings PFD
Performance |
| Timeline |
| Western Union |
| Burnham Holdings PFD |
Western Union and Burnham Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Union and Burnham Holdings
The main advantage of trading using opposite Western Union and Burnham Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Union 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.| Western Union vs. Navient Corp | Western Union vs. Green Dot | Western Union vs. Orix Corp Ads | Western Union vs. FirstCash |
| Burnham Holdings vs. Artisan Partners Asset | Burnham Holdings vs. Univest Pennsylvania | Burnham Holdings vs. The Coca Cola | Burnham Holdings vs. Freedom Bank of |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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