Correlation Between BURLINGTON STORES and Moncler SpA
Can any of the company-specific risk be diversified away by investing in both BURLINGTON STORES and Moncler SpA 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 Moncler SpA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BURLINGTON STORES and Moncler SpA, you can compare the effects of market volatilities on BURLINGTON STORES and Moncler SpA 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 Moncler SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of BURLINGTON STORES and Moncler SpA.
Diversification Opportunities for BURLINGTON STORES and Moncler SpA
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BURLINGTON and Moncler is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding BURLINGTON STORES and Moncler SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moncler SpA 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 Moncler SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moncler SpA has no effect on the direction of BURLINGTON STORES i.e., BURLINGTON STORES and Moncler SpA go up and down completely randomly.
Pair Corralation between BURLINGTON STORES and Moncler SpA
Assuming the 90 days trading horizon BURLINGTON STORES is expected to generate 1.13 times more return on investment than Moncler SpA. However, BURLINGTON STORES is 1.13 times more volatile than Moncler SpA. It trades about 0.43 of its potential returns per unit of risk. Moncler SpA is currently generating about -0.33 per unit of risk. If you would invest 23,200 in BURLINGTON STORES on August 29, 2024 and sell it today you would earn a total of 5,000 from holding BURLINGTON STORES or generate 21.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BURLINGTON STORES vs. Moncler SpA
Performance |
| Timeline |
| BURLINGTON STORES |
| Moncler SpA |
BURLINGTON STORES and Moncler SpA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BURLINGTON STORES and Moncler SpA
The main advantage of trading using opposite BURLINGTON STORES and Moncler SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BURLINGTON STORES position performs unexpectedly, Moncler SpA 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 Moncler SpA will offset losses from the drop in Moncler SpA's long position.| BURLINGTON STORES vs. Apple Inc | BURLINGTON STORES vs. Apple Inc | BURLINGTON STORES vs. Microsoft | BURLINGTON STORES vs. Microsoft |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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