Correlation Between BurTech Acquisition and Frontier Investment
Can any of the company-specific risk be diversified away by investing in both BurTech Acquisition and Frontier Investment 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 BurTech Acquisition and Frontier Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BurTech Acquisition Corp and Frontier Investment Corp, you can compare the effects of market volatilities on BurTech Acquisition and Frontier Investment 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 BurTech Acquisition with a short position of Frontier Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of BurTech Acquisition and Frontier Investment.
Diversification Opportunities for BurTech Acquisition and Frontier Investment
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BurTech and Frontier is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding BurTech Acquisition Corp and Frontier Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frontier Investment Corp and BurTech Acquisition 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 BurTech Acquisition Corp are associated (or correlated) with Frontier Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frontier Investment Corp has no effect on the direction of BurTech Acquisition i.e., BurTech Acquisition and Frontier Investment go up and down completely randomly.
Pair Corralation between BurTech Acquisition and Frontier Investment
Given the investment horizon of 90 days BurTech Acquisition is expected to generate 6.7 times less return on investment than Frontier Investment. But when comparing it to its historical volatility, BurTech Acquisition Corp is 1.48 times less risky than Frontier Investment. It trades about 0.1 of its potential returns per unit of risk. Frontier Investment Corp is currently generating about 0.45 of returns per unit of risk over similar time horizon. If you would invest 1,040 in Frontier Investment Corp on September 10, 2024 and sell it today you would earn a total of 10.00 from holding Frontier Investment Corp or generate 0.96% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 1.42% |
Values | Daily Returns |
BurTech Acquisition Corp vs. Frontier Investment Corp
Performance |
Timeline |
BurTech Acquisition Corp |
Frontier Investment Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
BurTech Acquisition and Frontier Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BurTech Acquisition and Frontier Investment
The main advantage of trading using opposite BurTech Acquisition and Frontier Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BurTech Acquisition position performs unexpectedly, Frontier Investment 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 Frontier Investment will offset losses from the drop in Frontier Investment's long position.BurTech Acquisition vs. Swiftmerge Acquisition Corp | BurTech Acquisition vs. CF Acquisition VII | BurTech Acquisition vs. Portage Fintech Acquisition | BurTech Acquisition vs. ClimateRock Class A |
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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 the Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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