Correlation Between Rigetti Computing and Burnham Holdings

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

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

Diversification Opportunities for Rigetti Computing and Burnham Holdings

0.67

Correlation Coefficient

Rigetti Computing  Burnham Holdings

Poor diversification

The 3 months correlation between Rigetti and Burnham is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Rigetti Computing 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 Rigetti Computing 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 Rigetti Computing 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 Rigetti Computing i.e., Rigetti Computing and Burnham Holdings go up and down completely randomly.

Pair Corralation between Rigetti Computing and Burnham Holdings

Given the investment horizon of 90 days Rigetti Computing is expected to generate 42.36 times more return on investment than Burnham Holdings. However, Rigetti Computing is 42.36 times more volatile than Burnham Holdings PFD. It trades about 0.4 of its potential returns per unit of risk. Burnham Holdings PFD is currently generating about 0.13 per unit of risk. If you would invest  78.00  in Rigetti Computing on October 8, 2024 and sell it today you would earn a total of  1,824  from holding Rigetti Computing or generate 2338.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Rigetti Computing  vs.  Burnham Holdings PFD

Rigetti Computing

Risk-Adjusted Performance

31 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Rigetti Computing are ranked lower than 31 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, Rigetti Computing demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Burnham Holdings PFD

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Burnham Holdings PFD are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. 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 Rigetti Computing and Burnham Holdings

The main advantage of trading using opposite Rigetti Computing and Burnham Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rigetti Computing 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 Rigetti Computing 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.