Correlation Between Burlington Stores and BROADWIND ENRGY
Can any of the company-specific risk be diversified away by investing in both Burlington Stores and BROADWIND ENRGY 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 BROADWIND ENRGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Burlington Stores and BROADWIND ENRGY, you can compare the effects of market volatilities on Burlington Stores and BROADWIND ENRGY 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 BROADWIND ENRGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burlington Stores and BROADWIND ENRGY.
Diversification Opportunities for Burlington Stores and BROADWIND ENRGY
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Burlington and BROADWIND is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Burlington Stores and BROADWIND ENRGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BROADWIND ENRGY 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 BROADWIND ENRGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BROADWIND ENRGY has no effect on the direction of Burlington Stores i.e., Burlington Stores and BROADWIND ENRGY go up and down completely randomly.
Pair Corralation between Burlington Stores and BROADWIND ENRGY
Assuming the 90 days trading horizon Burlington Stores is expected to generate 0.32 times more return on investment than BROADWIND ENRGY. However, Burlington Stores is 3.12 times less risky than BROADWIND ENRGY. It trades about -0.09 of its potential returns per unit of risk. BROADWIND ENRGY is currently generating about -0.05 per unit of risk. If you would invest 27,800 in Burlington Stores on October 30, 2024 and sell it today you would lose (800.00) from holding Burlington Stores or give up 2.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Burlington Stores vs. BROADWIND ENRGY
Performance |
| Timeline |
| Burlington Stores |
| BROADWIND ENRGY |
Burlington Stores and BROADWIND ENRGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Burlington Stores and BROADWIND ENRGY
The main advantage of trading using opposite Burlington Stores and BROADWIND ENRGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burlington Stores position performs unexpectedly, BROADWIND ENRGY 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 BROADWIND ENRGY will offset losses from the drop in BROADWIND ENRGY's long position.| Burlington Stores vs. Japan Asia Investment | Burlington Stores vs. HK Electric Investments | Burlington Stores vs. Apollo Investment Corp | Burlington Stores vs. Amkor Technology |
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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