Correlation Between PLAYMATES TOYS and BURLINGTON STORES
Can any of the company-specific risk be diversified away by investing in both PLAYMATES TOYS and BURLINGTON STORES 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 PLAYMATES TOYS and BURLINGTON STORES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PLAYMATES TOYS and BURLINGTON STORES, you can compare the effects of market volatilities on PLAYMATES TOYS and BURLINGTON STORES 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 PLAYMATES TOYS with a short position of BURLINGTON STORES. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLAYMATES TOYS and BURLINGTON STORES.
Diversification Opportunities for PLAYMATES TOYS and BURLINGTON STORES
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PLAYMATES and BURLINGTON is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding PLAYMATES TOYS and BURLINGTON STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BURLINGTON STORES and PLAYMATES TOYS 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 PLAYMATES TOYS are associated (or correlated) with BURLINGTON STORES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BURLINGTON STORES has no effect on the direction of PLAYMATES TOYS i.e., PLAYMATES TOYS and BURLINGTON STORES go up and down completely randomly.
Pair Corralation between PLAYMATES TOYS and BURLINGTON STORES
Assuming the 90 days trading horizon PLAYMATES TOYS is expected to under-perform the BURLINGTON STORES. In addition to that, PLAYMATES TOYS is 2.51 times more volatile than BURLINGTON STORES. It trades about 0.0 of its total potential returns per unit of risk. BURLINGTON STORES is currently generating about 0.15 per unit of volatility. If you would invest 25,400 in BURLINGTON STORES on October 19, 2024 and sell it today you would earn a total of 2,600 from holding BURLINGTON STORES or generate 10.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PLAYMATES TOYS vs. BURLINGTON STORES
Performance |
| Timeline |
| PLAYMATES TOYS |
| BURLINGTON STORES |
PLAYMATES TOYS and BURLINGTON STORES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PLAYMATES TOYS and BURLINGTON STORES
The main advantage of trading using opposite PLAYMATES TOYS and BURLINGTON STORES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLAYMATES TOYS position performs unexpectedly, BURLINGTON STORES 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 BURLINGTON STORES will offset losses from the drop in BURLINGTON STORES's long position.| PLAYMATES TOYS vs. Nippon Steel | PLAYMATES TOYS vs. The Yokohama Rubber | PLAYMATES TOYS vs. RELIANCE STEEL AL | PLAYMATES TOYS vs. ANGANG STEEL H |
| BURLINGTON STORES vs. GAMING FAC SA | BURLINGTON STORES vs. QINGCI GAMES INC | BURLINGTON STORES vs. PLAYMATES TOYS | BURLINGTON STORES vs. Taiwan Semiconductor Manufacturing |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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