Correlation Between BURLINGTON STORES and Perseus Mining
Can any of the company-specific risk be diversified away by investing in both BURLINGTON STORES and Perseus Mining 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 Perseus Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BURLINGTON STORES and Perseus Mining Limited, you can compare the effects of market volatilities on BURLINGTON STORES and Perseus Mining 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 Perseus Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of BURLINGTON STORES and Perseus Mining.
Diversification Opportunities for BURLINGTON STORES and Perseus Mining
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between BURLINGTON and Perseus is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding BURLINGTON STORES and Perseus Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perseus Mining 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 Perseus Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perseus Mining has no effect on the direction of BURLINGTON STORES i.e., BURLINGTON STORES and Perseus Mining go up and down completely randomly.
Pair Corralation between BURLINGTON STORES and Perseus Mining
Assuming the 90 days trading horizon BURLINGTON STORES is expected to generate 0.86 times more return on investment than Perseus Mining. However, BURLINGTON STORES is 1.16 times less risky than Perseus Mining. It trades about 0.04 of its potential returns per unit of risk. Perseus Mining Limited is currently generating about 0.03 per unit of risk. If you would invest 18,400 in BURLINGTON STORES on September 3, 2024 and sell it today you would earn a total of 8,800 from holding BURLINGTON STORES or generate 47.83% 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. Perseus Mining Limited
Performance |
| Timeline |
| BURLINGTON STORES |
| Perseus Mining |
BURLINGTON STORES and Perseus Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BURLINGTON STORES and Perseus Mining
The main advantage of trading using opposite BURLINGTON STORES and Perseus Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BURLINGTON STORES position performs unexpectedly, Perseus Mining 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 Perseus Mining will offset losses from the drop in Perseus Mining's long position.| BURLINGTON STORES vs. ULTRA CLEAN HLDGS | BURLINGTON STORES vs. Clean Energy Fuels | BURLINGTON STORES vs. COSTCO WHOLESALE CDR | BURLINGTON STORES vs. PICKN PAY STORES |
| Perseus Mining vs. ZIJIN MINH UNSPADR20 | Perseus Mining vs. Barrick Gold | Perseus Mining vs. Superior Plus Corp | Perseus Mining vs. NMI Holdings |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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