Correlation Between BURLINGTON STORES and BJs Wholesale
Can any of the company-specific risk be diversified away by investing in both BURLINGTON STORES and BJs Wholesale 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 BJs Wholesale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BURLINGTON STORES and BJs Wholesale Club, you can compare the effects of market volatilities on BURLINGTON STORES and BJs Wholesale 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 BJs Wholesale. Check out your portfolio center. Please also check ongoing floating volatility patterns of BURLINGTON STORES and BJs Wholesale.
Diversification Opportunities for BURLINGTON STORES and BJs Wholesale
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BURLINGTON and BJs is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding BURLINGTON STORES and BJs Wholesale Club in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BJs Wholesale Club 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 BJs Wholesale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BJs Wholesale Club has no effect on the direction of BURLINGTON STORES i.e., BURLINGTON STORES and BJs Wholesale go up and down completely randomly.
Pair Corralation between BURLINGTON STORES and BJs Wholesale
Assuming the 90 days trading horizon BURLINGTON STORES is expected to generate 2.5 times less return on investment than BJs Wholesale. In addition to that, BURLINGTON STORES is 1.13 times more volatile than BJs Wholesale Club. It trades about 0.08 of its total potential returns per unit of risk. BJs Wholesale Club is currently generating about 0.21 per unit of volatility. If you would invest 7,400 in BJs Wholesale Club on August 28, 2024 and sell it today you would earn a total of 1,900 from holding BJs Wholesale Club or generate 25.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
BURLINGTON STORES vs. BJs Wholesale Club
Performance |
| Timeline |
| BURLINGTON STORES |
| BJs Wholesale Club |
BURLINGTON STORES and BJs Wholesale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BURLINGTON STORES and BJs Wholesale
The main advantage of trading using opposite BURLINGTON STORES and BJs Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BURLINGTON STORES position performs unexpectedly, BJs Wholesale 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 BJs Wholesale will offset losses from the drop in BJs Wholesale's long position.| BURLINGTON STORES vs. Apple Inc | BURLINGTON STORES vs. Apple Inc | BURLINGTON STORES vs. Microsoft | BURLINGTON STORES vs. Microsoft |
| BJs Wholesale vs. Superior Plus Corp | BJs Wholesale vs. NMI Holdings | BJs Wholesale vs. Origin Agritech | BJs Wholesale vs. SIVERS SEMICONDUCTORS AB |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |