Correlation Between Burford Capital and Blackrock

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

Diversification Opportunities for Burford Capital and Blackrock

0.45
  Correlation Coefficient

Very weak diversification

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

Pair Corralation between Burford Capital and Blackrock

Considering the 90-day investment horizon Burford Capital is expected to generate 1.17 times more return on investment than Blackrock. However, Burford Capital is 1.17 times more volatile than Blackrock. It trades about 0.06 of its potential returns per unit of risk. Blackrock is currently generating about -0.17 per unit of risk. If you would invest  925.00  in Burford Capital on April 7, 2022 and sell it today you would earn a total of  28.00  from holding Burford Capital or generate 3.03% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Burford Capital  vs.  Blackrock

 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 latest stock price agitation, may contribute to short-term losses for the retail investors.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0125
Forward Annual Dividend Rate
0.12
Dividend Date
2022-06-17
Ex Dividend Date
2022-05-26

Burford Price Channel

Blackrock 
Blackrock Performance
0 of 100
Over the last 90 days Blackrock 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 essential indicators 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.

Blackrock Price Channel

Burford Capital and Blackrock Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Burford Capital and Blackrock

The main advantage of trading using opposite Burford Capital and Blackrock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burford Capital position performs unexpectedly, Blackrock 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 Blackrock will offset losses from the drop in Blackrock's long position.
The idea behind Burford Capital and Blackrock 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.

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