Correlation Between BURLINGTON STORES and SHELF DRILLING
Can any of the company-specific risk be diversified away by investing in both BURLINGTON STORES and SHELF DRILLING 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 SHELF DRILLING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BURLINGTON STORES and SHELF DRILLING LTD, you can compare the effects of market volatilities on BURLINGTON STORES and SHELF DRILLING 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 SHELF DRILLING. Check out your portfolio center. Please also check ongoing floating volatility patterns of BURLINGTON STORES and SHELF DRILLING.
Diversification Opportunities for BURLINGTON STORES and SHELF DRILLING
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BURLINGTON and SHELF is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding BURLINGTON STORES and SHELF DRILLING LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SHELF DRILLING LTD 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 SHELF DRILLING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SHELF DRILLING LTD has no effect on the direction of BURLINGTON STORES i.e., BURLINGTON STORES and SHELF DRILLING go up and down completely randomly.
Pair Corralation between BURLINGTON STORES and SHELF DRILLING
Assuming the 90 days trading horizon BURLINGTON STORES is expected to under-perform the SHELF DRILLING. But the stock apears to be less risky and, when comparing its historical volatility, BURLINGTON STORES is 1.91 times less risky than SHELF DRILLING. The stock trades about -0.21 of its potential returns per unit of risk. The SHELF DRILLING LTD is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 77.00 in SHELF DRILLING LTD on November 10, 2024 and sell it today you would lose (4.00) from holding SHELF DRILLING LTD or give up 5.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
BURLINGTON STORES vs. SHELF DRILLING LTD
Performance |
| Timeline |
| BURLINGTON STORES |
| SHELF DRILLING LTD |
BURLINGTON STORES and SHELF DRILLING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BURLINGTON STORES and SHELF DRILLING
The main advantage of trading using opposite BURLINGTON STORES and SHELF DRILLING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BURLINGTON STORES position performs unexpectedly, SHELF DRILLING 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 SHELF DRILLING will offset losses from the drop in SHELF DRILLING's long position.| BURLINGTON STORES vs. JAPAN AIRLINES | BURLINGTON STORES vs. Spirent Communications plc | BURLINGTON STORES vs. SOUTHWEST AIRLINES | BURLINGTON STORES vs. Verizon Communications |
| SHELF DRILLING vs. ELMOS SEMICONDUCTOR | SHELF DRILLING vs. Datang International Power | SHELF DRILLING vs. Alliance Data Systems | SHELF DRILLING vs. Nordic Semiconductor ASA |
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 CEOs Directory module to screen CEOs from public companies around the world.
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