Correlation Between BURLINGTON STORES and National Retail
Can any of the company-specific risk be diversified away by investing in both BURLINGTON STORES and National Retail 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 National Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BURLINGTON STORES and National Retail Properties, you can compare the effects of market volatilities on BURLINGTON STORES and National Retail 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 National Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of BURLINGTON STORES and National Retail.
Diversification Opportunities for BURLINGTON STORES and National Retail
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BURLINGTON and National is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding BURLINGTON STORES and National Retail Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Retail Prop 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 National Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Retail Prop has no effect on the direction of BURLINGTON STORES i.e., BURLINGTON STORES and National Retail go up and down completely randomly.
Pair Corralation between BURLINGTON STORES and National Retail
Assuming the 90 days trading horizon BURLINGTON STORES is expected to generate 1.26 times more return on investment than National Retail. However, BURLINGTON STORES is 1.26 times more volatile than National Retail Properties. It trades about 0.15 of its potential returns per unit of risk. National Retail Properties is currently generating about -0.01 per unit of risk. If you would invest 24,600 in BURLINGTON STORES on August 28, 2024 and sell it today you would earn a total of 3,600 from holding BURLINGTON STORES or generate 14.63% 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. National Retail Properties
Performance |
| Timeline |
| BURLINGTON STORES |
| National Retail Prop |
BURLINGTON STORES and National Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BURLINGTON STORES and National Retail
The main advantage of trading using opposite BURLINGTON STORES and National Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BURLINGTON STORES position performs unexpectedly, National Retail 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 National Retail will offset losses from the drop in National Retail's long position.| BURLINGTON STORES vs. Apple Inc | BURLINGTON STORES vs. Apple Inc | BURLINGTON STORES vs. Microsoft | BURLINGTON STORES vs. Microsoft |
| National Retail vs. Apple Inc | National Retail vs. Apple Inc | National Retail vs. Apple Inc | National Retail vs. Apple Inc |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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