Correlation Between BURLINGTON STORES and Semperit Aktiengesellscha
Can any of the company-specific risk be diversified away by investing in both BURLINGTON STORES and Semperit Aktiengesellscha 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 Semperit Aktiengesellscha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BURLINGTON STORES and Semperit Aktiengesellschaft Holding, you can compare the effects of market volatilities on BURLINGTON STORES and Semperit Aktiengesellscha 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 Semperit Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of BURLINGTON STORES and Semperit Aktiengesellscha.
Diversification Opportunities for BURLINGTON STORES and Semperit Aktiengesellscha
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between BURLINGTON and Semperit is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding BURLINGTON STORES and Semperit Aktiengesellschaft Ho in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semperit Aktiengesellscha 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 Semperit Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semperit Aktiengesellscha has no effect on the direction of BURLINGTON STORES i.e., BURLINGTON STORES and Semperit Aktiengesellscha go up and down completely randomly.
Pair Corralation between BURLINGTON STORES and Semperit Aktiengesellscha
Assuming the 90 days trading horizon BURLINGTON STORES is expected to generate 1.67 times more return on investment than Semperit Aktiengesellscha. However, BURLINGTON STORES is 1.67 times more volatile than Semperit Aktiengesellschaft Holding. It trades about 0.4 of its potential returns per unit of risk. Semperit Aktiengesellschaft Holding is currently generating about 0.1 per unit of risk. If you would invest 22,200 in BURLINGTON STORES on September 4, 2024 and sell it today you would earn a total of 4,400 from holding BURLINGTON STORES or generate 19.82% 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. Semperit Aktiengesellschaft Ho
Performance |
| Timeline |
| BURLINGTON STORES |
| Semperit Aktiengesellscha |
BURLINGTON STORES and Semperit Aktiengesellscha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BURLINGTON STORES and Semperit Aktiengesellscha
The main advantage of trading using opposite BURLINGTON STORES and Semperit Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BURLINGTON STORES position performs unexpectedly, Semperit Aktiengesellscha 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 Semperit Aktiengesellscha will offset losses from the drop in Semperit Aktiengesellscha's long position.| BURLINGTON STORES vs. TOTAL GABON | BURLINGTON STORES vs. Walgreens Boots Alliance | BURLINGTON STORES vs. Peak Resources Limited |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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