Correlation Between Burlington Stores and Hoist Finance
Can any of the company-specific risk be diversified away by investing in both Burlington Stores and Hoist Finance 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 Hoist Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Burlington Stores and Hoist Finance AB, you can compare the effects of market volatilities on Burlington Stores and Hoist Finance 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 Hoist Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burlington Stores and Hoist Finance.
Diversification Opportunities for Burlington Stores and Hoist Finance
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Burlington and Hoist is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Burlington Stores and Hoist Finance AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hoist Finance AB 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 Hoist Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hoist Finance AB has no effect on the direction of Burlington Stores i.e., Burlington Stores and Hoist Finance go up and down completely randomly.
Pair Corralation between Burlington Stores and Hoist Finance
Assuming the 90 days trading horizon Burlington Stores is expected to generate 4.15 times less return on investment than Hoist Finance. But when comparing it to its historical volatility, Burlington Stores is 1.25 times less risky than Hoist Finance. It trades about 0.03 of its potential returns per unit of risk. Hoist Finance AB is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 230.00 in Hoist Finance AB on November 7, 2024 and sell it today you would earn a total of 521.00 from holding Hoist Finance AB or generate 226.52% 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. Hoist Finance AB
Performance |
| Timeline |
| Burlington Stores |
| Hoist Finance AB |
Burlington Stores and Hoist Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Burlington Stores and Hoist Finance
The main advantage of trading using opposite Burlington Stores and Hoist Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burlington Stores position performs unexpectedly, Hoist Finance 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 Hoist Finance will offset losses from the drop in Hoist Finance's long position.| Burlington Stores vs. Solstad Offshore ASA | Burlington Stores vs. LAir Liquide SA | Burlington Stores vs. DELTA AIR LINES | Burlington Stores vs. CSSC Offshore Marine |
| Hoist Finance vs. VIENNA INSURANCE GR | Hoist Finance vs. Scottish Mortgage Investment | Hoist Finance vs. Safety Insurance Group | Hoist Finance vs. Canadian Utilities Limited |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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