Correlation Between BURLINGTON STORES and THORNEY TECHS
Can any of the company-specific risk be diversified away by investing in both BURLINGTON STORES and THORNEY TECHS 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 THORNEY TECHS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BURLINGTON STORES and THORNEY TECHS LTD, you can compare the effects of market volatilities on BURLINGTON STORES and THORNEY TECHS 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 THORNEY TECHS. Check out your portfolio center. Please also check ongoing floating volatility patterns of BURLINGTON STORES and THORNEY TECHS.
Diversification Opportunities for BURLINGTON STORES and THORNEY TECHS
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BURLINGTON and THORNEY is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding BURLINGTON STORES and THORNEY TECHS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THORNEY TECHS LTD 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 THORNEY TECHS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THORNEY TECHS LTD has no effect on the direction of BURLINGTON STORES i.e., BURLINGTON STORES and THORNEY TECHS go up and down completely randomly.
Pair Corralation between BURLINGTON STORES and THORNEY TECHS
Assuming the 90 days trading horizon BURLINGTON STORES is expected to generate 0.48 times more return on investment than THORNEY TECHS. However, BURLINGTON STORES is 2.07 times less risky than THORNEY TECHS. It trades about 0.03 of its potential returns per unit of risk. THORNEY TECHS LTD is currently generating about -0.01 per unit of risk. If you would invest 20,600 in BURLINGTON STORES on October 11, 2024 and sell it today you would earn a total of 6,600 from holding BURLINGTON STORES or generate 32.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
BURLINGTON STORES vs. THORNEY TECHS LTD
Performance |
| Timeline |
| BURLINGTON STORES |
| THORNEY TECHS LTD |
BURLINGTON STORES and THORNEY TECHS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BURLINGTON STORES and THORNEY TECHS
The main advantage of trading using opposite BURLINGTON STORES and THORNEY TECHS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BURLINGTON STORES position performs unexpectedly, THORNEY TECHS 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 THORNEY TECHS will offset losses from the drop in THORNEY TECHS's long position.| BURLINGTON STORES vs. CARSALESCOM | BURLINGTON STORES vs. BOS BETTER ONLINE | BURLINGTON STORES vs. DAIRY FARM INTL | BURLINGTON STORES vs. Dairy Farm International |
| THORNEY TECHS vs. Liberty Broadband | THORNEY TECHS vs. INTERNET INJPADR 1 | THORNEY TECHS vs. Nippon Light Metal | THORNEY TECHS vs. DAIDO METAL TD |
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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