Correlation Between LIFENET INSURANCE and Burlington Stores
Can any of the company-specific risk be diversified away by investing in both LIFENET INSURANCE 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 LIFENET INSURANCE and Burlington Stores into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LIFENET INSURANCE CO and Burlington Stores, you can compare the effects of market volatilities on LIFENET INSURANCE 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 LIFENET INSURANCE with a short position of Burlington Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of LIFENET INSURANCE and Burlington Stores.
Diversification Opportunities for LIFENET INSURANCE and Burlington Stores
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between LIFENET and Burlington is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding LIFENET INSURANCE CO and Burlington Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burlington Stores and LIFENET INSURANCE 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 LIFENET INSURANCE CO 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 LIFENET INSURANCE i.e., LIFENET INSURANCE and Burlington Stores go up and down completely randomly.
Pair Corralation between LIFENET INSURANCE and Burlington Stores
Assuming the 90 days horizon LIFENET INSURANCE CO is expected to under-perform the Burlington Stores. In addition to that, LIFENET INSURANCE is 1.49 times more volatile than Burlington Stores. It trades about -0.04 of its total potential returns per unit of risk. Burlington Stores is currently generating about 0.4 per unit of volatility. If you would invest 24,200 in Burlington Stores on September 12, 2024 and sell it today you would earn a total of 3,400 from holding Burlington Stores or generate 14.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LIFENET INSURANCE CO vs. Burlington Stores
Performance |
| Timeline |
| LIFENET INSURANCE |
| Burlington Stores |
LIFENET INSURANCE and Burlington Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LIFENET INSURANCE and Burlington Stores
The main advantage of trading using opposite LIFENET INSURANCE and Burlington Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LIFENET INSURANCE 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.| LIFENET INSURANCE vs. Xtrackers LevDAX | LIFENET INSURANCE vs. Lyxor 1 | LIFENET INSURANCE vs. Xtrackers ShortDAX |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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