Correlation Between Burnham Holdings and Risk George

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

By analyzing existing cross correlation between Burnham Holdings and Risk George Inds, you can compare the effects of market volatilities on Burnham Holdings and Risk George 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 Risk George. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burnham Holdings and Risk George.

Diversification Opportunities for Burnham Holdings and Risk George

-0.15

Correlation Coefficient

Burnham Holdings  Risk George

Good diversification

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

Pair Corralation between Burnham Holdings and Risk George

Assuming the 90 days horizon Burnham Holdings is expected to generate 1.94 times less return on investment than Risk George. But when comparing it to its historical volatility, Burnham Holdings is 1.15 times less risky than Risk George. It trades about 0.03 of its potential returns per unit of risk. Risk George Inds is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  991.00  in Risk George Inds on October 13, 2024 and sell it today you would earn a total of  659.00  from holding Risk George Inds or generate 66.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.89%
Values	Daily Returns

Burnham Holdings  vs.  Risk George Inds

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.

Risk George Inds

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Risk George Inds are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward indicators, Risk George may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Burnham Holdings and Risk George

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

The idea behind Burnham Holdings and Risk George Inds 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.