Correlation Between Bleuacacia and BurTech Acquisition

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

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

Diversification Opportunities for Bleuacacia and BurTech Acquisition

-0.18

Correlation Coefficient

Bleuacacia  BurTech Acquisition

Good diversification

The 3 months correlation between Bleuacacia and BurTech is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Bleuacacia Ltd Warrants 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 Bleuacacia 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 Bleuacacia Ltd Warrants 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 Bleuacacia i.e., Bleuacacia and BurTech Acquisition go up and down completely randomly.

Pair Corralation between Bleuacacia and BurTech Acquisition

Assuming the 90 days horizon Bleuacacia Ltd Warrants is expected to generate 2.65 times more return on investment than BurTech Acquisition. However, Bleuacacia is 2.65 times more volatile than BurTech Acquisition Corp. It trades about 0.16 of its potential returns per unit of risk. BurTech Acquisition Corp is currently generating about 0.09 per unit of risk. If you would invest  2.00  in Bleuacacia Ltd Warrants on October 7, 2024 and sell it today you would lose (1.03) from holding Bleuacacia Ltd Warrants or give up 51.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	52.27%
Values	Daily Returns

Bleuacacia Ltd Warrants  vs.  BurTech Acquisition Corp

Bleuacacia Warrants

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bleuacacia Ltd Warrants has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Bleuacacia is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

BurTech Acquisition Corp

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BurTech Acquisition Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal technical indicators, BurTech Acquisition showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bleuacacia and BurTech Acquisition

The main advantage of trading using opposite Bleuacacia and BurTech Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bleuacacia 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 Bleuacacia Ltd Warrants 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..