Correlation Between Burnham Holdings and Keweenaw Land

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

By analyzing existing cross correlation between Burnham Holdings and Keweenaw Land Association, you can compare the effects of market volatilities on Burnham Holdings and Keweenaw Land 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 Burnham Holdings with a short position of Keweenaw Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burnham Holdings and Keweenaw Land.

Diversification Opportunities for Burnham Holdings and Keweenaw Land

-0.15

Correlation Coefficient

Burnham Holdings  Keweenaw Land

Good diversification

The 3 months correlation between Burnham and Keweenaw is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Burnham Holdings and Keweenaw Land Association in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keweenaw Land Association and Burnham Holdings 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 Burnham Holdings are associated (or correlated) with Keweenaw Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keweenaw Land Association has no effect on the direction of Burnham Holdings i.e., Burnham Holdings and Keweenaw Land go up and down completely randomly.

Pair Corralation between Burnham Holdings and Keweenaw Land

Assuming the 90 days horizon Burnham Holdings is expected to generate 1.43 times less return on investment than Keweenaw Land. In addition to that, Burnham Holdings is 1.22 times more volatile than Keweenaw Land Association. It trades about 0.03 of its total potential returns per unit of risk. Keweenaw Land Association is currently generating about 0.05 per unit of volatility. If you would invest  2,150  in Keweenaw Land Association on October 13, 2024 and sell it today you would earn a total of  1,645  from holding Keweenaw Land Association or generate 76.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	93.54%
Values	Daily Returns

Burnham Holdings  vs.  Keweenaw Land Association

Burnham Holdings

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Burnham Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile fundamental indicators, Burnham Holdings may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Keweenaw Land Association

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Keweenaw Land Association are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile basic indicators, Keweenaw Land may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Burnham Holdings and Keweenaw Land

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

The idea behind Burnham Holdings and Keweenaw Land Association 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.