Correlation Between Burford Capital and Blucora

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

Diversification Opportunities for Burford Capital and Blucora

0.45
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Burford and Blucora is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Burford Capital and Blucora in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blucora and Burford Capital 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 Burford Capital are associated (or correlated) with Blucora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blucora has no effect on the direction of Burford Capital i.e., Burford Capital and Blucora go up and down completely randomly.

Pair Corralation between Burford Capital and Blucora

Considering the 90-day investment horizon Burford Capital is expected to generate 1.19 times less return on investment than Blucora. In addition to that, Burford Capital is 1.36 times more volatile than Blucora. It trades about 0.05 of its total potential returns per unit of risk. Blucora is currently generating about 0.08 per unit of volatility. If you would invest  1,769  in Blucora on April 8, 2022 and sell it today you would earn a total of  60.00  from holding Blucora or generate 3.39% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Burford Capital  vs.  Blucora

 Performance (%) 
      Timeline 
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

Blucora 
Blucora Performance
0 of 100
Over the last 90 days Blucora has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Blucora is not utilizing all of its potentials. The new stock price agitation, may contribute to short-term losses for the retail investors.

Structure and Payout Changes

Last Split Factor
1:10
Ex Dividend Date
2008-01-09
Last Split Date
2002-09-13

Blucora Price Channel

Burford Capital and Blucora Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Burford Capital and Blucora

The main advantage of trading using opposite Burford Capital and Blucora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burford Capital position performs unexpectedly, Blucora 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 Blucora will offset losses from the drop in Blucora's long position.
The idea behind Burford Capital and Blucora 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

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