Correlation Between BurgerFi International and Churchill Capital

Can any of the company-specific risk be diversified away by investing in both BurgerFi International and Churchill 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 BurgerFi International and Churchill Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BurgerFi International LLC and Churchill Capital Corp, you can compare the effects of market volatilities on BurgerFi International and Churchill 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 BurgerFi International with a short position of Churchill Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of BurgerFi International and Churchill Capital.

Diversification Opportunities for BurgerFi International and Churchill Capital

-0.53

Correlation Coefficient

BurgerFi International  Churchill Capital

Excellent diversification

The 3 months correlation between BurgerFi and Churchill is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding BurgerFi International LLC and Churchill Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Churchill Capital Corp and BurgerFi International 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 BurgerFi International LLC are associated (or correlated) with Churchill Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Churchill Capital Corp has no effect on the direction of BurgerFi International i.e., BurgerFi International and Churchill Capital go up and down completely randomly.

Pair Corralation between BurgerFi International and Churchill Capital

Assuming the 90 days horizon BurgerFi International LLC is expected to generate 58.14 times more return on investment than Churchill Capital. However, BurgerFi International is 58.14 times more volatile than Churchill Capital Corp. It trades about 0.05 of its potential returns per unit of risk. Churchill Capital Corp is currently generating about 0.07 per unit of risk. If you would invest  31.00  in BurgerFi International LLC on March 8, 2024 and sell it today you would lose (28.00) from holding BurgerFi International LLC or give up 90.32% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.39%
Values	Daily Returns

BurgerFi International LLC  vs.  Churchill Capital Corp

BurgerFi International

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BurgerFi International LLC are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal forward indicators, BurgerFi International showed solid returns over the last few months and may actually be approaching a breakup point.

Churchill Capital Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Churchill Capital Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Churchill Capital is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with BurgerFi International and Churchill Capital

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

The idea behind BurgerFi International LLC and Churchill Capital Corp 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.