Correlation Between Burford Capital and Chembio Diagnostics

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Burford Capital and Chembio Diagnostics 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 Chembio Diagnostics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Burford Capital and Chembio Diagnostics, you can compare the effects of market volatilities on Burford Capital and Chembio Diagnostics 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 Chembio Diagnostics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burford Capital and Chembio Diagnostics.

Diversification Opportunities for Burford Capital and Chembio Diagnostics

-0.03
  Correlation Coefficient

Good diversification

The 3 months correlation between Burford and Chembio is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Burford Capital and Chembio Diagnostics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chembio Diagnostics 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 Chembio Diagnostics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chembio Diagnostics has no effect on the direction of Burford Capital i.e., Burford Capital and Chembio Diagnostics go up and down completely randomly.

Pair Corralation between Burford Capital and Chembio Diagnostics

Considering the 90-day investment horizon Burford Capital is expected to generate 0.25 times more return on investment than Chembio Diagnostics. However, Burford Capital is 4.03 times less risky than Chembio Diagnostics. It trades about 0.0 of its potential returns per unit of risk. Chembio Diagnostics is currently generating about -0.03 per unit of risk. If you would invest  937.00  in Burford Capital on September 8, 2022 and sell it today you would lose (79.00)  from holding Burford Capital or give up 8.43% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Burford Capital  vs.  Chembio Diagnostics

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

Burford Price Channel

Chembio Diagnostics 
Chembio Performance
0 of 100
Over the last 90 days Chembio Diagnostics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's primary indicators remain nearly stable which may send shares a bit higher in January 2023. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Chembio Price Channel

Burford Capital and Chembio Diagnostics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Burford Capital and Chembio Diagnostics

The main advantage of trading using opposite Burford Capital and Chembio Diagnostics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burford Capital position performs unexpectedly, Chembio Diagnostics 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 Chembio Diagnostics will offset losses from the drop in Chembio Diagnostics' long position.
Burford Capital vs. Microsoft
Burford Capital vs. Alphabet Inc Class
Burford Capital vs. Dupont De Nemours
Burford Capital vs. Fidelity MSCI Energy
The idea behind Burford Capital and Chembio Diagnostics 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.
Chembio Diagnostics vs. Merck Company
Chembio Diagnostics vs. Johnson Johnson
Chembio Diagnostics vs. Bondbloxx ETF Trust
Chembio Diagnostics vs. Fidelity MSCI Energy
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

Other Complementary Tools

Risk-Return Analysis
View associations between returns expected from investment and the risk you assume
Go
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Go
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Go
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Go
Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Go
ETF Directory
Find actively traded Exchange Traded Funds (ETF) from around the world
Go
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Go
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Go
Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets
Go
Share Portfolio
Track or share privately all of your investments from the convenience of any device
Go
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Go