Correlation Between BURLINGTON STORES and Sibanye Stillwater
Can any of the company-specific risk be diversified away by investing in both BURLINGTON STORES and Sibanye Stillwater 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 Sibanye Stillwater into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BURLINGTON STORES and Sibanye Stillwater Limited, you can compare the effects of market volatilities on BURLINGTON STORES and Sibanye Stillwater 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 Sibanye Stillwater. Check out your portfolio center. Please also check ongoing floating volatility patterns of BURLINGTON STORES and Sibanye Stillwater.
Diversification Opportunities for BURLINGTON STORES and Sibanye Stillwater
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between BURLINGTON and Sibanye is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding BURLINGTON STORES and Sibanye Stillwater Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sibanye Stillwater 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 Sibanye Stillwater. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sibanye Stillwater has no effect on the direction of BURLINGTON STORES i.e., BURLINGTON STORES and Sibanye Stillwater go up and down completely randomly.
Pair Corralation between BURLINGTON STORES and Sibanye Stillwater
Assuming the 90 days trading horizon BURLINGTON STORES is expected to generate 0.61 times more return on investment than Sibanye Stillwater. However, BURLINGTON STORES is 1.64 times less risky than Sibanye Stillwater. It trades about 0.29 of its potential returns per unit of risk. Sibanye Stillwater Limited is currently generating about -0.13 per unit of risk. If you would invest 23,600 in BURLINGTON STORES on September 1, 2024 and sell it today you would earn a total of 3,600 from holding BURLINGTON STORES or generate 15.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BURLINGTON STORES vs. Sibanye Stillwater Limited
Performance |
| Timeline |
| BURLINGTON STORES |
| Sibanye Stillwater |
BURLINGTON STORES and Sibanye Stillwater Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BURLINGTON STORES and Sibanye Stillwater
The main advantage of trading using opposite BURLINGTON STORES and Sibanye Stillwater positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BURLINGTON STORES position performs unexpectedly, Sibanye Stillwater 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 Sibanye Stillwater will offset losses from the drop in Sibanye Stillwater's long position.| BURLINGTON STORES vs. SIVERS SEMICONDUCTORS AB | BURLINGTON STORES vs. Darden Restaurants | BURLINGTON STORES vs. Reliance Steel Aluminum | BURLINGTON STORES vs. Q2M Managementberatung AG |
| Sibanye Stillwater vs. Playtech plc | Sibanye Stillwater vs. UNITED UTILITIES GR | Sibanye Stillwater vs. Major Drilling Group | Sibanye Stillwater vs. Algonquin Power Utilities |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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