Correlation Between Burlington Stores and Pan Pacific
Can any of the company-specific risk be diversified away by investing in both Burlington Stores and Pan Pacific 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 Pan Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Burlington Stores and Pan Pacific International, you can compare the effects of market volatilities on Burlington Stores and Pan Pacific 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 Pan Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burlington Stores and Pan Pacific.
Diversification Opportunities for Burlington Stores and Pan Pacific
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Burlington and Pan is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Burlington Stores and Pan Pacific International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pan Pacific International 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 Pan Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pan Pacific International has no effect on the direction of Burlington Stores i.e., Burlington Stores and Pan Pacific go up and down completely randomly.
Pair Corralation between Burlington Stores and Pan Pacific
Assuming the 90 days horizon Burlington Stores is expected to generate 1.39 times more return on investment than Pan Pacific. However, Burlington Stores is 1.39 times more volatile than Pan Pacific International. It trades about 0.25 of its potential returns per unit of risk. Pan Pacific International is currently generating about 0.11 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 Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Burlington Stores vs. Pan Pacific International
Performance |
| Timeline |
| Burlington Stores |
| Pan Pacific International |
Burlington Stores and Pan Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Burlington Stores and Pan Pacific
The main advantage of trading using opposite Burlington Stores and Pan Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burlington Stores position performs unexpectedly, Pan Pacific 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 Pan Pacific will offset losses from the drop in Pan Pacific'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 |
| Pan Pacific vs. KINGBOARD CHEMICAL | Pan Pacific vs. X FAB Silicon Foundries | Pan Pacific vs. TIANDE CHEMICAL | Pan Pacific vs. SEKISUI CHEMICAL |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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