Correlation Between HYDROFARM HLD and Burlington Stores
Can any of the company-specific risk be diversified away by investing in both HYDROFARM HLD 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 HYDROFARM HLD and Burlington Stores into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HYDROFARM HLD GRP and Burlington Stores, you can compare the effects of market volatilities on HYDROFARM HLD 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 HYDROFARM HLD with a short position of Burlington Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of HYDROFARM HLD and Burlington Stores.
Diversification Opportunities for HYDROFARM HLD and Burlington Stores
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between HYDROFARM and Burlington is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding HYDROFARM HLD GRP and Burlington Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burlington Stores and HYDROFARM HLD 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 HYDROFARM HLD GRP 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 HYDROFARM HLD i.e., HYDROFARM HLD and Burlington Stores go up and down completely randomly.
Pair Corralation between HYDROFARM HLD and Burlington Stores
Assuming the 90 days trading horizon HYDROFARM HLD is expected to generate 183.17 times less return on investment than Burlington Stores. In addition to that, HYDROFARM HLD is 2.45 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 0.05 per unit of volatility. If you would invest 18,100 in Burlington Stores on September 12, 2024 and sell it today you would earn a total of 9,300 from holding Burlington Stores or generate 51.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HYDROFARM HLD GRP vs. Burlington Stores
Performance |
| Timeline |
| HYDROFARM HLD GRP |
| Burlington Stores |
HYDROFARM HLD and Burlington Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HYDROFARM HLD and Burlington Stores
The main advantage of trading using opposite HYDROFARM HLD and Burlington Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HYDROFARM HLD 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' long position.| HYDROFARM HLD vs. AB Volvo | HYDROFARM HLD vs. Daimler Truck Holding | HYDROFARM HLD vs. Superior Plus Corp | HYDROFARM HLD vs. SIVERS SEMICONDUCTORS AB |
| Burlington Stores vs. Amkor Technology | Burlington Stores vs. RCM TECHNOLOGIES | Burlington Stores vs. Samsung Electronics Co | Burlington Stores vs. AM EAGLE OUTFITTERS |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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