Correlation Between BurTech Acquisition and Blockchain Coinvestors

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

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

Diversification Opportunities for BurTech Acquisition and Blockchain Coinvestors

0.63

Correlation Coefficient

BurTech Acquisition  Blockchain Coinvestors

Poor diversification

The 3 months correlation between BurTech and Blockchain is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding BurTech Acquisition Corp and Blockchain Coinvestors Acquisi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blockchain Coinvestors and BurTech Acquisition 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 BurTech Acquisition Corp are associated (or correlated) with Blockchain Coinvestors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blockchain Coinvestors has no effect on the direction of BurTech Acquisition i.e., BurTech Acquisition and Blockchain Coinvestors go up and down completely randomly.

Pair Corralation between BurTech Acquisition and Blockchain Coinvestors

Assuming the 90 days horizon BurTech Acquisition Corp is expected to under-perform the Blockchain Coinvestors. But the stock apears to be less risky and, when comparing its historical volatility, BurTech Acquisition Corp is 63.78 times less risky than Blockchain Coinvestors. The stock trades about -0.09 of its potential returns per unit of risk. The Blockchain Coinvestors Acquisition is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  5.70  in Blockchain Coinvestors Acquisition on September 18, 2024 and sell it today you would lose (5.61) from holding Blockchain Coinvestors Acquisition or give up 98.42% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	57.14%
Values	Daily Returns

BurTech Acquisition Corp  vs.  Blockchain Coinvestors Acquisi

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.

Blockchain Coinvestors

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Blockchain Coinvestors Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly weak basic indicators, Blockchain Coinvestors showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BurTech Acquisition and Blockchain Coinvestors

The main advantage of trading using opposite BurTech Acquisition and Blockchain Coinvestors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BurTech Acquisition position performs unexpectedly, Blockchain Coinvestors 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 Blockchain Coinvestors will offset losses from the drop in Blockchain Coinvestors' long position.

The idea behind BurTech Acquisition Corp and Blockchain Coinvestors Acquisition 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.