Correlation Between EDP - and Burnham Holdings

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

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

Diversification Opportunities for EDP - and Burnham Holdings

0.0

Correlation Coefficient

EDP -  Burnham Holdings

Pay attention - limited upside

The 3 months correlation between EDP and Burnham is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EDP Energias and Burnham Holdings PFD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burnham Holdings PFD and EDP - 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 EDP Energias are associated (or correlated) with Burnham Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burnham Holdings PFD has no effect on the direction of EDP - i.e., EDP - and Burnham Holdings go up and down completely randomly.

Pair Corralation between EDP - and Burnham Holdings

If you would invest  0.00  in Burnham Holdings PFD on October 22, 2024 and sell it today you would earn a total of  0.00  from holding Burnham Holdings PFD or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	5.56%
Values	Daily Returns

EDP Energias  vs.  Burnham Holdings PFD

EDP Energias

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EDP Energias has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Burnham Holdings PFD

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Burnham Holdings PFD has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental indicators, Burnham Holdings is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with EDP - and Burnham Holdings

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

The idea behind EDP Energias and Burnham Holdings PFD 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.