Correlation Between LAir Liquide and Burlington Stores
Can any of the company-specific risk be diversified away by investing in both LAir Liquide 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 LAir Liquide and Burlington Stores into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LAir Liquide SA and Burlington Stores, you can compare the effects of market volatilities on LAir Liquide 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 LAir Liquide with a short position of Burlington Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of LAir Liquide and Burlington Stores.
Diversification Opportunities for LAir Liquide and Burlington Stores
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between LAir and Burlington is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding LAir Liquide SA and Burlington Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burlington Stores and LAir Liquide 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 LAir Liquide SA 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 LAir Liquide i.e., LAir Liquide and Burlington Stores go up and down completely randomly.
Pair Corralation between LAir Liquide and Burlington Stores
Assuming the 90 days horizon LAir Liquide SA is expected to generate 0.68 times more return on investment than Burlington Stores. However, LAir Liquide SA is 1.46 times less risky than Burlington Stores. It trades about 0.03 of its potential returns per unit of risk. Burlington Stores is currently generating about -0.01 per unit of risk. If you would invest 18,358 in LAir Liquide SA on January 14, 2025 and sell it today you would earn a total of 1,005 from holding LAir Liquide SA or generate 5.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.39% |
| Values | Daily Returns |
LAir Liquide SA vs. Burlington Stores
Performance |
| Timeline |
| LAir Liquide SA |
| Burlington Stores |
LAir Liquide and Burlington Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LAir Liquide and Burlington Stores
The main advantage of trading using opposite LAir Liquide and Burlington Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LAir Liquide 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.| LAir Liquide vs. Asia Carbon Industries | LAir Liquide vs. Akzo Nobel NV | LAir Liquide vs. Avoca LLC | LAir Liquide vs. AGC Inc ADR |
| Burlington Stores vs. The TJX Companies | Burlington Stores vs. Guess Inc | Burlington Stores vs. Urban Outfitters | Burlington Stores vs. Childrens Place |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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