Correlation Between Bank of New York and Burford Capital

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Can any of the company-specific risk be diversified away by investing in both Bank of New York and Burford Capital 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 Bank of New York and Burford Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Of New and Burford Capital, you can compare the effects of market volatilities on Bank of New York and Burford Capital 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 Bank of New York with a short position of Burford Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of New York and Burford Capital.

Diversification Opportunities for Bank of New York and Burford Capital

0.18
  Correlation Coefficient

Average diversification

The 3 months correlation between Bank of New York and Burford is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Bank Of New and Burford Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burford Capital and Bank of New York 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 Bank Of New are associated (or correlated) with Burford Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burford Capital has no effect on the direction of Bank of New York i.e., Bank of New York and Burford Capital go up and down completely randomly.

Pair Corralation between Bank of New York and Burford Capital

Allowing for the 90-day total investment horizon Bank of New York is expected to generate 1.89 times less return on investment than Burford Capital. But when comparing it to its historical volatility, Bank Of New is 1.52 times less risky than Burford Capital. It trades about 0.03 of its potential returns per unit of risk. Burford Capital is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  679.00  in Burford Capital on April 8, 2022 and sell it today you would earn a total of  274.00  from holding Burford Capital or generate 40.35% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy99.2%
ValuesDaily Returns

Bank Of New  vs.  Burford Capital

 Performance (%) 
      Timeline 
Bank of New York 
Bank of New York Performance
0 of 100
Over the last 90 days Bank Of New has generated negative risk-adjusted returns adding no value to investors with long positions. Despite sluggish performance in the last few months, the Stock's forward-looking signals remain fairly strong which may send shares a bit higher in August 2022. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Bank of New York Price Channel

Burford Capital 
Burford Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Burford Capital are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Burford Capital is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0124
Forward Annual Dividend Rate
0.12
Dividend Date
2022-06-17
Ex Dividend Date
2022-05-26

Burford Price Channel

Bank of New York and Burford Capital Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Bank of New York and Burford Capital

The main advantage of trading using opposite Bank of New York and Burford Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of New York position performs unexpectedly, Burford Capital 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 Burford Capital will offset losses from the drop in Burford Capital's long position.
The idea behind Bank Of New and Burford Capital 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.
Check out your portfolio center. 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.

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