Correlation Between BURLINGTON STORES and Vivendi SE
Can any of the company-specific risk be diversified away by investing in both BURLINGTON STORES and Vivendi 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 Vivendi 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 Vivendi SE, you can compare the effects of market volatilities on BURLINGTON STORES and Vivendi 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 Vivendi SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of BURLINGTON STORES and Vivendi SE.
Diversification Opportunities for BURLINGTON STORES and Vivendi SE
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BURLINGTON and Vivendi is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding BURLINGTON STORES and Vivendi SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivendi 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 Vivendi SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vivendi SE has no effect on the direction of BURLINGTON STORES i.e., BURLINGTON STORES and Vivendi SE go up and down completely randomly.
Pair Corralation between BURLINGTON STORES and Vivendi SE
Assuming the 90 days trading horizon BURLINGTON STORES is expected to generate 0.22 times more return on investment than Vivendi SE. However, BURLINGTON STORES is 4.58 times less risky than Vivendi SE. It trades about 0.11 of its potential returns per unit of risk. Vivendi SE is currently generating about -0.03 per unit of risk. If you would invest 22,400 in BURLINGTON STORES on November 3, 2024 and sell it today you would earn a total of 5,800 from holding BURLINGTON STORES or generate 25.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BURLINGTON STORES vs. Vivendi SE
Performance |
| Timeline |
| BURLINGTON STORES |
| Vivendi SE |
BURLINGTON STORES and Vivendi SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BURLINGTON STORES and Vivendi SE
The main advantage of trading using opposite BURLINGTON STORES and Vivendi SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BURLINGTON STORES position performs unexpectedly, Vivendi 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 Vivendi SE will offset losses from the drop in Vivendi SE's long position.| BURLINGTON STORES vs. Apple Inc | BURLINGTON STORES vs. Apple Inc | BURLINGTON STORES vs. Apple Inc | BURLINGTON STORES vs. Apple Inc |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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