Correlation Between BURLINGTON STORES and Vonovia SE
Can any of the company-specific risk be diversified away by investing in both BURLINGTON STORES and Vonovia SE 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 Vonovia SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BURLINGTON STORES and Vonovia SE, you can compare the effects of market volatilities on BURLINGTON STORES and Vonovia SE 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 Vonovia SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of BURLINGTON STORES and Vonovia SE.
Diversification Opportunities for BURLINGTON STORES and Vonovia SE
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between BURLINGTON and Vonovia is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding BURLINGTON STORES and Vonovia SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vonovia SE 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 Vonovia SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vonovia SE has no effect on the direction of BURLINGTON STORES i.e., BURLINGTON STORES and Vonovia SE go up and down completely randomly.
Pair Corralation between BURLINGTON STORES and Vonovia SE
Assuming the 90 days trading horizon BURLINGTON STORES is expected to generate 1.12 times more return on investment than Vonovia SE. However, BURLINGTON STORES is 1.12 times more volatile than Vonovia SE. It trades about 0.04 of its potential returns per unit of risk. Vonovia SE is currently generating about 0.05 per unit of risk. If you would invest 18,100 in BURLINGTON STORES on September 12, 2024 and sell it today you would earn a total of 9,300 from holding BURLINGTON STORES or generate 51.38% 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. Vonovia SE
Performance |
| Timeline |
| BURLINGTON STORES |
| Vonovia SE |
BURLINGTON STORES and Vonovia SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BURLINGTON STORES and Vonovia SE
The main advantage of trading using opposite BURLINGTON STORES and Vonovia SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BURLINGTON STORES position performs unexpectedly, Vonovia SE 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 Vonovia SE will offset losses from the drop in Vonovia SE's long position.| BURLINGTON STORES vs. Apple Inc | BURLINGTON STORES vs. Apple Inc | BURLINGTON STORES vs. Apple Inc | BURLINGTON STORES vs. Apple Inc |
| Vonovia SE vs. Ares Management Corp | Vonovia SE vs. BURLINGTON STORES | Vonovia SE vs. Cleanaway Waste Management | Vonovia SE vs. MARKET VECTR RETAIL |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |