Correlation Between Burlington Stores and Daito Trust
Can any of the company-specific risk be diversified away by investing in both Burlington Stores and Daito Trust 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 Daito Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Burlington Stores and Daito Trust Construction, you can compare the effects of market volatilities on Burlington Stores and Daito Trust 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 Daito Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burlington Stores and Daito Trust.
Diversification Opportunities for Burlington Stores and Daito Trust
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Burlington and Daito is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Burlington Stores and Daito Trust Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daito Trust Construction 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 Daito Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daito Trust Construction has no effect on the direction of Burlington Stores i.e., Burlington Stores and Daito Trust go up and down completely randomly.
Pair Corralation between Burlington Stores and Daito Trust
Assuming the 90 days trading horizon Burlington Stores is expected to generate 1.68 times more return on investment than Daito Trust. However, Burlington Stores is 1.68 times more volatile than Daito Trust Construction. It trades about 0.04 of its potential returns per unit of risk. Daito Trust Construction is currently generating about 0.03 per unit of risk. If you would invest 20,800 in Burlington Stores on November 1, 2024 and sell it today you would earn a total of 7,000 from holding Burlington Stores or generate 33.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Burlington Stores vs. Daito Trust Construction
Performance |
| Timeline |
| Burlington Stores |
| Daito Trust Construction |
Burlington Stores and Daito Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Burlington Stores and Daito Trust
The main advantage of trading using opposite Burlington Stores and Daito Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burlington Stores position performs unexpectedly, Daito Trust 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 Daito Trust will offset losses from the drop in Daito Trust's long position.| Burlington Stores vs. Gladstone Investment | Burlington Stores vs. Keck Seng Investments | Burlington Stores vs. Warner Music Group | Burlington Stores vs. MGIC INVESTMENT |
| Daito Trust vs. MARKET VECTR RETAIL | Daito Trust vs. SPARTAN STORES | Daito Trust vs. COSTCO WHOLESALE CDR | Daito Trust vs. Burlington Stores |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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