Correlation Between BJs Wholesale and BURLINGTON STORES
Can any of the company-specific risk be diversified away by investing in both BJs Wholesale 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 BJs Wholesale and BURLINGTON STORES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BJs Wholesale Club and BURLINGTON STORES, you can compare the effects of market volatilities on BJs Wholesale 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 BJs Wholesale with a short position of BURLINGTON STORES. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Wholesale and BURLINGTON STORES.
Diversification Opportunities for BJs Wholesale and BURLINGTON STORES
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BJs and BURLINGTON is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding BJs Wholesale Club and BURLINGTON STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BURLINGTON STORES and BJs Wholesale 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 BJs Wholesale Club 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 BJs Wholesale i.e., BJs Wholesale and BURLINGTON STORES go up and down completely randomly.
Pair Corralation between BJs Wholesale and BURLINGTON STORES
Assuming the 90 days horizon BJs Wholesale is expected to generate 1.21 times less return on investment than BURLINGTON STORES. In addition to that, BJs Wholesale is 1.16 times more volatile than BURLINGTON STORES. It trades about 0.31 of its total potential returns per unit of risk. BURLINGTON STORES is currently generating about 0.43 per unit of volatility. If you would invest 23,200 in BURLINGTON STORES on August 28, 2024 and sell it today you would earn a total of 5,000 from holding BURLINGTON STORES or generate 21.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BJs Wholesale Club vs. BURLINGTON STORES
Performance |
| Timeline |
| BJs Wholesale Club |
| BURLINGTON STORES |
BJs Wholesale and BURLINGTON STORES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Wholesale and BURLINGTON STORES
The main advantage of trading using opposite BJs Wholesale and BURLINGTON STORES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Wholesale 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.| BJs Wholesale vs. Superior Plus Corp | BJs Wholesale vs. NMI Holdings | BJs Wholesale vs. Origin Agritech | BJs Wholesale vs. SIVERS SEMICONDUCTORS AB |
| BURLINGTON STORES vs. Apple Inc | BURLINGTON STORES vs. Apple Inc | BURLINGTON STORES vs. Microsoft | BURLINGTON STORES vs. Microsoft |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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