Correlation Between Bm Technologies and Burford Capital

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

Diversification Opportunities for Bm Technologies and Burford Capital

-0.66
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Bm Technologies and Burford is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Bm Technologies and Burford Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burford Capital and Bm Technologies 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 Bm Technologies 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 Bm Technologies i.e., Bm Technologies and Burford Capital go up and down completely randomly.

Pair Corralation between Bm Technologies and Burford Capital

Given the investment horizon of 90 days Bm Technologies is expected to generate 1.25 times more return on investment than Burford Capital. However, Bm Technologies is 1.25 times more volatile than Burford Capital. It trades about 0.3 of its potential returns per unit of risk. Burford Capital is currently generating about -0.15 per unit of risk. If you would invest  629.00  in Bm Technologies on July 9, 2022 and sell it today you would earn a total of  145.00  from holding Bm Technologies or generate 23.05% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Bm Technologies  vs.  Burford Capital

 Performance (%) 
       Timeline  
Bm Technologies 
Bm Technologies Performance
11 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Bm Technologies are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Bm Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

Bm Technologies Price Channel

Burford Capital 
Burford Performance
0 of 100
Over the last 90 days Burford Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in November 2022. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Burford Price Channel

Bm Technologies and Burford Capital Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bm Technologies and Burford Capital

The main advantage of trading using opposite Bm Technologies and Burford Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bm Technologies 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.
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The idea behind Bm Technologies 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.
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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 Transaction History module to view history of all your transactions and understand their impact on performance.

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