Correlation Between BURLINGTON STORES and TROPHY GAMES
Can any of the company-specific risk be diversified away by investing in both BURLINGTON STORES and TROPHY GAMES 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 TROPHY GAMES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BURLINGTON STORES and TROPHY GAMES DEV, you can compare the effects of market volatilities on BURLINGTON STORES and TROPHY GAMES 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 TROPHY GAMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of BURLINGTON STORES and TROPHY GAMES.
Diversification Opportunities for BURLINGTON STORES and TROPHY GAMES
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BURLINGTON and TROPHY is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding BURLINGTON STORES and TROPHY GAMES DEV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TROPHY GAMES DEV 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 TROPHY GAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TROPHY GAMES DEV has no effect on the direction of BURLINGTON STORES i.e., BURLINGTON STORES and TROPHY GAMES go up and down completely randomly.
Pair Corralation between BURLINGTON STORES and TROPHY GAMES
Assuming the 90 days trading horizon BURLINGTON STORES is expected to generate 0.78 times more return on investment than TROPHY GAMES. However, BURLINGTON STORES is 1.29 times less risky than TROPHY GAMES. It trades about 0.24 of its potential returns per unit of risk. TROPHY GAMES DEV is currently generating about -0.07 per unit of risk. If you would invest 23,600 in BURLINGTON STORES on August 25, 2024 and sell it today you would earn a total of 2,400 from holding BURLINGTON STORES or generate 10.17% 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. TROPHY GAMES DEV
Performance |
| Timeline |
| BURLINGTON STORES |
| TROPHY GAMES DEV |
BURLINGTON STORES and TROPHY GAMES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BURLINGTON STORES and TROPHY GAMES
The main advantage of trading using opposite BURLINGTON STORES and TROPHY GAMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BURLINGTON STORES position performs unexpectedly, TROPHY GAMES 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 TROPHY GAMES will offset losses from the drop in TROPHY GAMES's long position.| BURLINGTON STORES vs. Apple Inc | BURLINGTON STORES vs. Apple Inc | BURLINGTON STORES vs. Apple Inc | BURLINGTON STORES vs. Apple Inc |
| TROPHY GAMES vs. Sea Limited | TROPHY GAMES vs. NEXON Co | TROPHY GAMES vs. Take Two Interactive Software | TROPHY GAMES vs. Bilibili |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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