Correlation Between Burlington Stores and MEDICAL FACILITIES
Can any of the company-specific risk be diversified away by investing in both Burlington Stores and MEDICAL FACILITIES 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 MEDICAL FACILITIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Burlington Stores and MEDICAL FACILITIES NEW, you can compare the effects of market volatilities on Burlington Stores and MEDICAL FACILITIES 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 MEDICAL FACILITIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burlington Stores and MEDICAL FACILITIES.
Diversification Opportunities for Burlington Stores and MEDICAL FACILITIES
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Burlington and MEDICAL is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Burlington Stores and MEDICAL FACILITIES NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDICAL FACILITIES NEW 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 MEDICAL FACILITIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDICAL FACILITIES NEW has no effect on the direction of Burlington Stores i.e., Burlington Stores and MEDICAL FACILITIES go up and down completely randomly.
Pair Corralation between Burlington Stores and MEDICAL FACILITIES
Assuming the 90 days trading horizon Burlington Stores is expected to generate 1.86 times less return on investment than MEDICAL FACILITIES. But when comparing it to its historical volatility, Burlington Stores is 1.13 times less risky than MEDICAL FACILITIES. It trades about 0.04 of its potential returns per unit of risk. MEDICAL FACILITIES NEW is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 513.00 in MEDICAL FACILITIES NEW on October 12, 2024 and sell it today you would earn a total of 517.00 from holding MEDICAL FACILITIES NEW or generate 100.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Burlington Stores vs. MEDICAL FACILITIES NEW
Performance |
| Timeline |
| Burlington Stores |
| MEDICAL FACILITIES NEW |
Burlington Stores and MEDICAL FACILITIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Burlington Stores and MEDICAL FACILITIES
The main advantage of trading using opposite Burlington Stores and MEDICAL FACILITIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burlington Stores position performs unexpectedly, MEDICAL FACILITIES 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 MEDICAL FACILITIES will offset losses from the drop in MEDICAL FACILITIES's long position.| Burlington Stores vs. Broadcom | Burlington Stores vs. TAL Education Group | Burlington Stores vs. Gold Road Resources | Burlington Stores vs. DeVry Education Group |
| MEDICAL FACILITIES vs. Burlington Stores | MEDICAL FACILITIES vs. QUEEN S ROAD | MEDICAL FACILITIES vs. Broadwind | MEDICAL FACILITIES vs. TRAINLINE PLC LS |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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