Correlation Between BURLINGTON STORES and Talanx AG
Can any of the company-specific risk be diversified away by investing in both BURLINGTON STORES and Talanx AG 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 Talanx AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BURLINGTON STORES and Talanx AG, you can compare the effects of market volatilities on BURLINGTON STORES and Talanx AG 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 Talanx AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of BURLINGTON STORES and Talanx AG.
Diversification Opportunities for BURLINGTON STORES and Talanx AG
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BURLINGTON and Talanx is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding BURLINGTON STORES and Talanx AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Talanx AG 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 Talanx AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Talanx AG has no effect on the direction of BURLINGTON STORES i.e., BURLINGTON STORES and Talanx AG go up and down completely randomly.
Pair Corralation between BURLINGTON STORES and Talanx AG
Assuming the 90 days trading horizon BURLINGTON STORES is expected to generate 1.81 times more return on investment than Talanx AG. However, BURLINGTON STORES is 1.81 times more volatile than Talanx AG. It trades about 0.31 of its potential returns per unit of risk. Talanx AG is currently generating about 0.43 per unit of risk. If you would invest 23,400 in BURLINGTON STORES on August 31, 2024 and sell it today you would earn a total of 3,800 from holding BURLINGTON STORES or generate 16.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BURLINGTON STORES vs. Talanx AG
Performance |
| Timeline |
| BURLINGTON STORES |
| Talanx AG |
BURLINGTON STORES and Talanx AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BURLINGTON STORES and Talanx AG
The main advantage of trading using opposite BURLINGTON STORES and Talanx AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BURLINGTON STORES position performs unexpectedly, Talanx AG 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 Talanx AG will offset losses from the drop in Talanx AG's long position.| BURLINGTON STORES vs. SIVERS SEMICONDUCTORS AB | BURLINGTON STORES vs. Darden Restaurants | BURLINGTON STORES vs. Reliance Steel Aluminum | BURLINGTON STORES vs. Q2M Managementberatung AG |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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