Correlation Between BURLINGTON STORES and Hyundai
Can any of the company-specific risk be diversified away by investing in both BURLINGTON STORES and Hyundai 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 Hyundai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BURLINGTON STORES and Hyundai Motor, you can compare the effects of market volatilities on BURLINGTON STORES and Hyundai 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 Hyundai. Check out your portfolio center. Please also check ongoing floating volatility patterns of BURLINGTON STORES and Hyundai.
Diversification Opportunities for BURLINGTON STORES and Hyundai
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BURLINGTON and Hyundai is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding BURLINGTON STORES and Hyundai Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Motor 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 Hyundai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Motor has no effect on the direction of BURLINGTON STORES i.e., BURLINGTON STORES and Hyundai go up and down completely randomly.
Pair Corralation between BURLINGTON STORES and Hyundai
Assuming the 90 days trading horizon BURLINGTON STORES is expected to generate 1.57 times less return on investment than Hyundai. In addition to that, BURLINGTON STORES is 1.13 times more volatile than Hyundai Motor. It trades about 0.03 of its total potential returns per unit of risk. Hyundai Motor is currently generating about 0.06 per unit of volatility. If you would invest 2,890 in Hyundai Motor on September 27, 2024 and sell it today you would earn a total of 1,960 from holding Hyundai Motor or generate 67.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.59% |
| Values | Daily Returns |
BURLINGTON STORES vs. Hyundai Motor
Performance |
| Timeline |
| BURLINGTON STORES |
| Hyundai Motor |
BURLINGTON STORES and Hyundai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BURLINGTON STORES and Hyundai
The main advantage of trading using opposite BURLINGTON STORES and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BURLINGTON STORES position performs unexpectedly, Hyundai 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 Hyundai will offset losses from the drop in Hyundai's long position.The idea behind BURLINGTON STORES and Hyundai Motor pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Hyundai vs. Tencent Music Entertainment | Hyundai vs. Southwest Airlines Co | Hyundai vs. Nok Airlines PCL | Hyundai vs. Electronic Arts |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |