Correlation Between Burnham Holdings and Hanover Foods
Can any of the company-specific risk be diversified away by investing in both Burnham Holdings and Hanover Foods 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 Burnham Holdings and Hanover Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Burnham Holdings and Hanover Foods, you can compare the effects of market volatilities on Burnham Holdings and Hanover Foods 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 Burnham Holdings with a short position of Hanover Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burnham Holdings and Hanover Foods.
Diversification Opportunities for Burnham Holdings and Hanover Foods
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Burnham and Hanover is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Burnham Holdings and Hanover Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanover Foods and Burnham Holdings 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 Burnham Holdings are associated (or correlated) with Hanover Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanover Foods has no effect on the direction of Burnham Holdings i.e., Burnham Holdings and Hanover Foods go up and down completely randomly.
Pair Corralation between Burnham Holdings and Hanover Foods
If you would invest 1,370 in Burnham Holdings on September 26, 2024 and sell it today you would earn a total of 25.00 from holding Burnham Holdings or generate 1.82% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Burnham Holdings vs. Hanover Foods
Performance |
Timeline |
Burnham Holdings |
Hanover Foods |
Burnham Holdings and Hanover Foods Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Burnham Holdings and Hanover Foods
The main advantage of trading using opposite Burnham Holdings and Hanover Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burnham Holdings position performs unexpectedly, Hanover Foods 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 Hanover Foods will offset losses from the drop in Hanover Foods' long position.Burnham Holdings vs. Travis Perkins PLC | Burnham Holdings vs. Armstrong World Industries | Burnham Holdings vs. Apogee Enterprises |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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