Correlation Between Burlington Stores, and Ross Stores
Can any of the company-specific risk be diversified away by investing in both Burlington Stores, and Ross 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 Burlington Stores, and Ross Stores into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Burlington Stores, and Ross Stores, you can compare the effects of market volatilities on Burlington Stores, and Ross 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 Burlington Stores, with a short position of Ross Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burlington Stores, and Ross Stores.
Diversification Opportunities for Burlington Stores, and Ross Stores
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Burlington and Ross is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Burlington Stores, and Ross Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ross Stores and Burlington Stores, 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 Burlington Stores, are associated (or correlated) with Ross Stores. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ross Stores has no effect on the direction of Burlington Stores, i.e., Burlington Stores, and Ross Stores go up and down completely randomly.
Pair Corralation between Burlington Stores, and Ross Stores
Assuming the 90 days trading horizon Burlington Stores, is expected to under-perform the Ross Stores. In addition to that, Burlington Stores, is 1.37 times more volatile than Ross Stores. It trades about -0.19 of its total potential returns per unit of risk. Ross Stores is currently generating about -0.22 per unit of volatility. If you would invest 45,632 in Ross Stores on November 5, 2024 and sell it today you would lose (1,555) from holding Ross Stores or give up 3.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 71.43% |
| Values | Daily Returns |
Burlington Stores, vs. Ross Stores
Performance |
| Timeline |
| Burlington Stores, |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Ross Stores |
Burlington Stores, and Ross Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Burlington Stores, and Ross Stores
The main advantage of trading using opposite Burlington Stores, and Ross Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burlington Stores, position performs unexpectedly, Ross 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 Ross Stores will offset losses from the drop in Ross Stores' long position.| Burlington Stores, vs. Unity Software | Burlington Stores, vs. BIONTECH SE DRN | Burlington Stores, vs. Broadridge Financial Solutions, | Burlington Stores, vs. UnitedHealth Group Incorporated |
| Ross Stores vs. LPL Financial Holdings | Ross Stores vs. The Bank of | Ross Stores vs. Grendene SA | Ross Stores vs. Ameriprise Financial |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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