Correlation Between HP and Burford Capital

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

Diversification Opportunities for HP and Burford Capital

0.89
  Correlation Coefficient

Very poor diversification

The 3 months correlation between HP and Burford is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding HP Inc and Burford Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burford Capital and HP 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 HP Inc 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 HP i.e., HP and Burford Capital go up and down completely randomly.

Pair Corralation between HP and Burford Capital

Considering the 90-day investment horizon HP Inc is expected to generate 1.04 times more return on investment than Burford Capital. However, HP is 1.04 times more volatile than Burford Capital. It trades about 0.1 of its potential returns per unit of risk. Burford Capital is currently generating about 0.1 per unit of risk. If you would invest  2,678  in HP Inc on September 5, 2022 and sell it today you would earn a total of  286.00  from holding HP Inc or generate 10.68% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy97.73%
ValuesDaily Returns

HP Inc  vs.  Burford Capital

 Performance (%) 
       Timeline  
HP Inc 
HP Performance
5 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in HP Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, HP may actually be approaching a critical reversion point that can send shares even higher in January 2023.

HP Price Channel

Burford Capital 
Burford Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Burford Capital are ranked lower than 1 (%) 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

HP and Burford Capital Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with HP and Burford Capital

The main advantage of trading using opposite HP and Burford Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HP 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.
HP vs. Applied Opt
HP vs. ADTRAN Inc
HP vs. Airgain
HP vs. Akoustis Technologies
The idea behind HP Inc 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.
Burford Capital vs. Central Securities
Burford Capital vs. CI Financial Corp
Burford Capital vs. Ellsworth Convertible Growth
Burford Capital vs. Federated Investors
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.

Other Complementary Tools

Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Go
Transaction History
View history of all your transactions and understand their impact on performance
Go
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Go
Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios
Go
Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Go
Content Syndication
Quickly integrate customizable finance content to your own investment portal
Go
Crypto Correlations
Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins
Go
Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
Go