Correlation Between Burlington Stores and Altia Oyj
Can any of the company-specific risk be diversified away by investing in both Burlington Stores and Altia Oyj 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 Altia Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Burlington Stores and Altia Oyj, you can compare the effects of market volatilities on Burlington Stores and Altia Oyj 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 Altia Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burlington Stores and Altia Oyj.
Diversification Opportunities for Burlington Stores and Altia Oyj
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Burlington and Altia is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Burlington Stores and Altia Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altia Oyj 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 Altia Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altia Oyj has no effect on the direction of Burlington Stores i.e., Burlington Stores and Altia Oyj go up and down completely randomly.
Pair Corralation between Burlington Stores and Altia Oyj
Assuming the 90 days trading horizon Burlington Stores is expected to generate 1.02 times more return on investment than Altia Oyj. However, Burlington Stores is 1.02 times more volatile than Altia Oyj. It trades about 0.03 of its potential returns per unit of risk. Altia Oyj is currently generating about -0.07 per unit of risk. If you would invest 21,200 in Burlington Stores on November 10, 2024 and sell it today you would earn a total of 4,000 from holding Burlington Stores or generate 18.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Burlington Stores vs. Altia Oyj
Performance |
| Timeline |
| Burlington Stores |
| Altia Oyj |
Burlington Stores and Altia Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Burlington Stores and Altia Oyj
The main advantage of trading using opposite Burlington Stores and Altia Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burlington Stores position performs unexpectedly, Altia Oyj 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 Altia Oyj will offset losses from the drop in Altia Oyj's long position.| Burlington Stores vs. Caseys General Stores | Burlington Stores vs. FAST RETAIL ADR | Burlington Stores vs. Carnegie Clean Energy | Burlington Stores vs. Fast Retailing Co |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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