Correlation Between COVIVIO HOTELS and Burlington Stores
Can any of the company-specific risk be diversified away by investing in both COVIVIO HOTELS 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 COVIVIO HOTELS and Burlington Stores into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COVIVIO HOTELS INH and Burlington Stores, you can compare the effects of market volatilities on COVIVIO HOTELS 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 COVIVIO HOTELS with a short position of Burlington Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of COVIVIO HOTELS and Burlington Stores.
Diversification Opportunities for COVIVIO HOTELS and Burlington Stores
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between COVIVIO and Burlington is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding COVIVIO HOTELS INH and Burlington Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burlington Stores and COVIVIO HOTELS 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 COVIVIO HOTELS INH 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 COVIVIO HOTELS i.e., COVIVIO HOTELS and Burlington Stores go up and down completely randomly.
Pair Corralation between COVIVIO HOTELS and Burlington Stores
Assuming the 90 days horizon COVIVIO HOTELS INH is expected to generate 0.83 times more return on investment than Burlington Stores. However, COVIVIO HOTELS INH is 1.21 times less risky than Burlington Stores. It trades about 0.14 of its potential returns per unit of risk. Burlington Stores is currently generating about 0.1 per unit of risk. If you would invest 1,425 in COVIVIO HOTELS INH on September 25, 2024 and sell it today you would earn a total of 435.00 from holding COVIVIO HOTELS INH or generate 30.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
COVIVIO HOTELS INH vs. Burlington Stores
Performance |
| Timeline |
| COVIVIO HOTELS INH |
| Burlington Stores |
COVIVIO HOTELS and Burlington Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COVIVIO HOTELS and Burlington Stores
The main advantage of trading using opposite COVIVIO HOTELS and Burlington Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COVIVIO HOTELS 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.| COVIVIO HOTELS vs. Granite Construction | COVIVIO HOTELS vs. H FARM SPA | COVIVIO HOTELS vs. ALEFARM BREWING DK 05 | COVIVIO HOTELS vs. MCEWEN MINING INC |
| Burlington Stores vs. COVIVIO HOTELS INH | Burlington Stores vs. DALATA HOTEL | Burlington Stores vs. National Beverage Corp | Burlington Stores vs. INTERCONT HOTELS |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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