Correlation Between BURLINGTON STORES and Casio Computer
Can any of the company-specific risk be diversified away by investing in both BURLINGTON STORES and Casio Computer 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 Casio Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BURLINGTON STORES and Casio Computer CoLtd, you can compare the effects of market volatilities on BURLINGTON STORES and Casio Computer 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 Casio Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of BURLINGTON STORES and Casio Computer.
Diversification Opportunities for BURLINGTON STORES and Casio Computer
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BURLINGTON and Casio is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding BURLINGTON STORES and Casio Computer CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Casio Computer CoLtd 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 Casio Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Casio Computer CoLtd has no effect on the direction of BURLINGTON STORES i.e., BURLINGTON STORES and Casio Computer go up and down completely randomly.
Pair Corralation between BURLINGTON STORES and Casio Computer
Assuming the 90 days trading horizon BURLINGTON STORES is expected to generate 1.55 times more return on investment than Casio Computer. However, BURLINGTON STORES is 1.55 times more volatile than Casio Computer CoLtd. It trades about 0.04 of its potential returns per unit of risk. Casio Computer CoLtd is currently generating about -0.02 per unit of risk. If you would invest 19,000 in BURLINGTON STORES on September 24, 2024 and sell it today you would earn a total of 8,000 from holding BURLINGTON STORES or generate 42.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BURLINGTON STORES vs. Casio Computer CoLtd
Performance |
| Timeline |
| BURLINGTON STORES |
| Casio Computer CoLtd |
BURLINGTON STORES and Casio Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BURLINGTON STORES and Casio Computer
The main advantage of trading using opposite BURLINGTON STORES and Casio Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BURLINGTON STORES position performs unexpectedly, Casio Computer 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 Casio Computer will offset losses from the drop in Casio Computer's long position.| BURLINGTON STORES vs. INVITATION HOMES DL | BURLINGTON STORES vs. CSSC Offshore Marine | BURLINGTON STORES vs. Luckin Coffee | BURLINGTON STORES vs. SCANSOURCE |
| Casio Computer vs. Ameriprise Financial | Casio Computer vs. BURLINGTON STORES | Casio Computer vs. QBE Insurance Group | Casio Computer vs. OAKTRSPECLENDNEW |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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