Correlation Between Associated Capital and BurTech Acquisition

Can any of the company-specific risk be diversified away by investing in both Associated Capital 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 Associated Capital and BurTech Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Associated Capital Group and BurTech Acquisition Corp, you can compare the effects of market volatilities on Associated Capital 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 Associated Capital with a short position of BurTech Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Capital and BurTech Acquisition.

Diversification Opportunities for Associated Capital and BurTech Acquisition

-0.77

Correlation Coefficient

Associated Capital  BurTech Acquisition

Pay attention - limited upside

The 3 months correlation between Associated and BurTech is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Associated Capital 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 Associated Capital 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 Associated Capital 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 Associated Capital i.e., Associated Capital and BurTech Acquisition go up and down completely randomly.

Pair Corralation between Associated Capital and BurTech Acquisition

Allowing for the 90-day total investment horizon Associated Capital Group is expected to under-perform the BurTech Acquisition. In addition to that, Associated Capital is 4.54 times more volatile than BurTech Acquisition Corp. It trades about 0.0 of its total potential returns per unit of risk. BurTech Acquisition Corp is currently generating about 0.12 per unit of volatility. If you would invest  1,160  in BurTech Acquisition Corp on September 13, 2024 and sell it today you would earn a total of  10.00  from holding BurTech Acquisition Corp or generate 0.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Associated Capital Group  vs.  BurTech Acquisition Corp

Associated Capital

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Associated Capital Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile fundamental indicators, Associated Capital exhibited solid returns over the last few months and may actually be approaching a breakup point.

BurTech Acquisition Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BurTech Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical indicators, BurTech Acquisition is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Associated Capital and BurTech Acquisition

The main advantage of trading using opposite Associated Capital and BurTech Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated Capital 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 Associated Capital 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.

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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.