Correlation Between Burford Capital and Cytodyn

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

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

Diversification Opportunities for Burford Capital and Cytodyn

-0.31

Correlation Coefficient

Burford Capital  Cytodyn

Very good diversification

The 3 months correlation between Burford and Cytodyn is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Burford Capital and Cytodyn in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cytodyn and Burford Capital 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 Burford Capital are associated (or correlated) with Cytodyn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cytodyn has no effect on the direction of Burford Capital i.e., Burford Capital and Cytodyn go up and down completely randomly.

Pair Corralation between Burford Capital and Cytodyn

Considering the 90-day investment horizon Burford Capital is expected to generate 0.43 times more return on investment than Cytodyn. However, Burford Capital is 2.3 times less risky than Cytodyn. It trades about 0.05 of its potential returns per unit of risk. Cytodyn is currently generating about 0.02 per unit of risk. If you would invest  839.00  in Burford Capital on January 20, 2024 and sell it today you would earn a total of  647.00  from holding Burford Capital or generate 77.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Burford Capital  vs.  Cytodyn

Burford Capital

Risk-Adjusted Performance

1 of 100

Weak

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 recent stock price agitation, may contribute to short-term losses for the retail investors.

Cytodyn

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cytodyn are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain fundamental indicators, Cytodyn may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with Burford Capital and Cytodyn

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

The idea behind Burford Capital and Cytodyn 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..