Correlation Between BCE and Burlington Stores
Can any of the company-specific risk be diversified away by investing in both BCE 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 BCE and Burlington Stores into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BCE Inc and Burlington Stores, you can compare the effects of market volatilities on BCE 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 BCE with a short position of Burlington Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of BCE and Burlington Stores.
Diversification Opportunities for BCE and Burlington Stores
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between BCE and Burlington is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding BCE Inc and Burlington Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burlington Stores and BCE 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 BCE Inc 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 BCE i.e., BCE and Burlington Stores go up and down completely randomly.
Pair Corralation between BCE and Burlington Stores
Considering the 90-day investment horizon BCE Inc is expected to under-perform the Burlington Stores. In addition to that, BCE is 1.1 times more volatile than Burlington Stores. It trades about -0.41 of its total potential returns per unit of risk. Burlington Stores is currently generating about 0.35 per unit of volatility. If you would invest 25,328 in Burlington Stores on August 27, 2024 and sell it today you would earn a total of 3,838 from holding Burlington Stores or generate 15.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BCE Inc vs. Burlington Stores
Performance |
| Timeline |
| BCE Inc |
| Burlington Stores |
BCE and Burlington Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BCE and Burlington Stores
The main advantage of trading using opposite BCE and Burlington Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BCE 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.| BCE vs. Liberty Broadband Srs | BCE vs. Ribbon Communications | BCE vs. Liberty Broadband Srs | BCE vs. Shenandoah Telecommunications Co |
| 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |