Correlation Between Burlington Stores and Target
Can any of the company-specific risk be diversified away by investing in both Burlington Stores and Target 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 Target into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Burlington Stores and Target, you can compare the effects of market volatilities on Burlington Stores and Target 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 Target. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burlington Stores and Target.
Diversification Opportunities for Burlington Stores and Target
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Burlington and Target is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Burlington Stores and Target in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Target 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 Target. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Target has no effect on the direction of Burlington Stores i.e., Burlington Stores and Target go up and down completely randomly.
Pair Corralation between Burlington Stores and Target
Assuming the 90 days horizon Burlington Stores is expected to generate 0.51 times more return on investment than Target. However, Burlington Stores is 1.96 times less risky than Target. It trades about 0.25 of its potential returns per unit of risk. Target is currently generating about -0.05 per unit of risk. If you would invest 23,600 in Burlington Stores on September 1, 2024 and sell it today you would earn a total of 3,600 from holding Burlington Stores or generate 15.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Burlington Stores vs. Target
Performance |
| Timeline |
| Burlington Stores |
| Target |
Burlington Stores and Target Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Burlington Stores and Target
The main advantage of trading using opposite Burlington Stores and Target positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burlington Stores position performs unexpectedly, Target 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 Target will offset losses from the drop in Target's long position.| Burlington Stores vs. Cogent Communications Holdings | Burlington Stores vs. Darden Restaurants | Burlington Stores vs. MCEWEN MINING INC | Burlington Stores vs. MINCO SILVER |
| Target vs. TOREX SEMICONDUCTOR LTD | Target vs. MagnaChip Semiconductor Corp | Target vs. Magnachip Semiconductor | Target vs. DELTA AIR LINES |
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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