Correlation Between Pinelawn Cemetery and Burnham Holdings

Can any of the company-specific risk be diversified away by investing in both Pinelawn Cemetery and Burnham Holdings 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 Pinelawn Cemetery and Burnham Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pinelawn Cemetery and Burnham Holdings, you can compare the effects of market volatilities on Pinelawn Cemetery and Burnham Holdings 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 Pinelawn Cemetery with a short position of Burnham Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pinelawn Cemetery and Burnham Holdings.

Diversification Opportunities for Pinelawn Cemetery and Burnham Holdings

-0.61

Correlation Coefficient

Pinelawn Cemetery  Burnham Holdings

Excellent diversification

The 3 months correlation between Pinelawn and Burnham is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Pinelawn Cemetery and Burnham Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burnham Holdings and Pinelawn Cemetery 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 Pinelawn Cemetery are associated (or correlated) with Burnham Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burnham Holdings has no effect on the direction of Pinelawn Cemetery i.e., Pinelawn Cemetery and Burnham Holdings go up and down completely randomly.

Pair Corralation between Pinelawn Cemetery and Burnham Holdings

Given the investment horizon of 90 days Pinelawn Cemetery is expected to under-perform the Burnham Holdings. But the pink sheet apears to be less risky and, when comparing its historical volatility, Pinelawn Cemetery is 4.16 times less risky than Burnham Holdings. The pink sheet trades about -0.09 of its potential returns per unit of risk. The Burnham Holdings is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1,268  in Burnham Holdings on September 13, 2024 and sell it today you would earn a total of  142.00  from holding Burnham Holdings or generate 11.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Pinelawn Cemetery  vs.  Burnham Holdings

Pinelawn Cemetery

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pinelawn Cemetery has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Pinelawn Cemetery is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Burnham Holdings

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Burnham Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Burnham Holdings may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Pinelawn Cemetery and Burnham Holdings

The main advantage of trading using opposite Pinelawn Cemetery and Burnham Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pinelawn Cemetery position performs unexpectedly, Burnham Holdings 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 Burnham Holdings will offset losses from the drop in Burnham Holdings' long position.

The idea behind Pinelawn Cemetery and Burnham Holdings 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.

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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.