Correlation Between BURLINGTON STORES and REDSUN PROPERTIES
Can any of the company-specific risk be diversified away by investing in both BURLINGTON STORES and REDSUN PROPERTIES 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 REDSUN PROPERTIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BURLINGTON STORES and REDSUN PROPERTIES GROUP, you can compare the effects of market volatilities on BURLINGTON STORES and REDSUN PROPERTIES 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 REDSUN PROPERTIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of BURLINGTON STORES and REDSUN PROPERTIES.
Diversification Opportunities for BURLINGTON STORES and REDSUN PROPERTIES
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BURLINGTON and REDSUN is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding BURLINGTON STORES and REDSUN PROPERTIES GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REDSUN PROPERTIES 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 REDSUN PROPERTIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REDSUN PROPERTIES has no effect on the direction of BURLINGTON STORES i.e., BURLINGTON STORES and REDSUN PROPERTIES go up and down completely randomly.
Pair Corralation between BURLINGTON STORES and REDSUN PROPERTIES
Assuming the 90 days trading horizon BURLINGTON STORES is expected to generate 13.65 times less return on investment than REDSUN PROPERTIES. But when comparing it to its historical volatility, BURLINGTON STORES is 17.61 times less risky than REDSUN PROPERTIES. It trades about 0.13 of its potential returns per unit of risk. REDSUN PROPERTIES GROUP is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 0.60 in REDSUN PROPERTIES GROUP on August 28, 2024 and sell it today you would lose (0.40) from holding REDSUN PROPERTIES GROUP or give up 66.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BURLINGTON STORES vs. REDSUN PROPERTIES GROUP
Performance |
| Timeline |
| BURLINGTON STORES |
| REDSUN PROPERTIES |
BURLINGTON STORES and REDSUN PROPERTIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BURLINGTON STORES and REDSUN PROPERTIES
The main advantage of trading using opposite BURLINGTON STORES and REDSUN PROPERTIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BURLINGTON STORES position performs unexpectedly, REDSUN PROPERTIES 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 REDSUN PROPERTIES will offset losses from the drop in REDSUN PROPERTIES's long position.| BURLINGTON STORES vs. GOLD ROAD RES | BURLINGTON STORES vs. QUEEN S ROAD | BURLINGTON STORES vs. MINCO SILVER | BURLINGTON STORES vs. Texas Roadhouse |
| REDSUN PROPERTIES vs. JIAHUA STORES | REDSUN PROPERTIES vs. Daido Steel Co | REDSUN PROPERTIES vs. BURLINGTON STORES | REDSUN PROPERTIES vs. BLUESCOPE STEEL |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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