Correlation Between Burlington Stores and PLAY2CHILL
Can any of the company-specific risk be diversified away by investing in both Burlington Stores and PLAY2CHILL 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 PLAY2CHILL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Burlington Stores and PLAY2CHILL SA ZY, you can compare the effects of market volatilities on Burlington Stores and PLAY2CHILL 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 PLAY2CHILL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burlington Stores and PLAY2CHILL.
Diversification Opportunities for Burlington Stores and PLAY2CHILL
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Burlington and PLAY2CHILL is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Burlington Stores and PLAY2CHILL SA ZY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLAY2CHILL SA ZY 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 PLAY2CHILL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLAY2CHILL SA ZY has no effect on the direction of Burlington Stores i.e., Burlington Stores and PLAY2CHILL go up and down completely randomly.
Pair Corralation between Burlington Stores and PLAY2CHILL
Assuming the 90 days trading horizon Burlington Stores is expected to generate 1.25 times more return on investment than PLAY2CHILL. However, Burlington Stores is 1.25 times more volatile than PLAY2CHILL SA ZY. It trades about 0.1 of its potential returns per unit of risk. PLAY2CHILL SA ZY is currently generating about -0.04 per unit of risk. If you would invest 27,400 in Burlington Stores on October 14, 2024 and sell it today you would earn a total of 800.00 from holding Burlington Stores or generate 2.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Burlington Stores vs. PLAY2CHILL SA ZY
Performance |
| Timeline |
| Burlington Stores |
| PLAY2CHILL SA ZY |
Burlington Stores and PLAY2CHILL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Burlington Stores and PLAY2CHILL
The main advantage of trading using opposite Burlington Stores and PLAY2CHILL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burlington Stores position performs unexpectedly, PLAY2CHILL 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 PLAY2CHILL will offset losses from the drop in PLAY2CHILL's long position.| Burlington Stores vs. Apple Inc | Burlington Stores vs. Apple Inc | Burlington Stores vs. Apple Inc | Burlington Stores vs. Apple Inc |
| PLAY2CHILL vs. Burlington Stores | PLAY2CHILL vs. JLF INVESTMENT | PLAY2CHILL vs. Guangdong Investment Limited | PLAY2CHILL vs. Caseys General 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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