Correlation Between PT Bank and Burlington Stores
Can any of the company-specific risk be diversified away by investing in both PT Bank 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 PT Bank and Burlington Stores into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Bank Maybank and Burlington Stores, you can compare the effects of market volatilities on PT Bank 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 PT Bank with a short position of Burlington Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Bank and Burlington Stores.
Diversification Opportunities for PT Bank and Burlington Stores
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BOZA and Burlington is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding PT Bank Maybank and Burlington Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burlington Stores and PT Bank 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 PT Bank Maybank 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 PT Bank i.e., PT Bank and Burlington Stores go up and down completely randomly.
Pair Corralation between PT Bank and Burlington Stores
Assuming the 90 days trading horizon PT Bank is expected to generate 2.22 times less return on investment than Burlington Stores. In addition to that, PT Bank is 2.25 times more volatile than Burlington Stores. It trades about 0.07 of its total potential returns per unit of risk. Burlington Stores is currently generating about 0.36 per unit of volatility. If you would invest 24,600 in Burlington Stores on September 13, 2024 and sell it today you would earn a total of 3,000 from holding Burlington Stores or generate 12.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Bank Maybank vs. Burlington Stores
Performance |
| Timeline |
| PT Bank Maybank |
| Burlington Stores |
PT Bank and Burlington Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Bank and Burlington Stores
The main advantage of trading using opposite PT Bank and Burlington Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Bank 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.| PT Bank vs. China Merchants Bank | PT Bank vs. HDFC Bank Limited | PT Bank vs. ICICI Bank Limited | PT Bank vs. PT Bank Central |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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