Correlation Between Burlington Stores and DAWSON GEOPHYSICAL
Can any of the company-specific risk be diversified away by investing in both Burlington Stores and DAWSON GEOPHYSICAL 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 DAWSON GEOPHYSICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Burlington Stores and DAWSON GEOPHYSICAL, you can compare the effects of market volatilities on Burlington Stores and DAWSON GEOPHYSICAL 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 DAWSON GEOPHYSICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burlington Stores and DAWSON GEOPHYSICAL.
Diversification Opportunities for Burlington Stores and DAWSON GEOPHYSICAL
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Burlington and DAWSON is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Burlington Stores and DAWSON GEOPHYSICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DAWSON GEOPHYSICAL 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 DAWSON GEOPHYSICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DAWSON GEOPHYSICAL has no effect on the direction of Burlington Stores i.e., Burlington Stores and DAWSON GEOPHYSICAL go up and down completely randomly.
Pair Corralation between Burlington Stores and DAWSON GEOPHYSICAL
Assuming the 90 days trading horizon Burlington Stores is expected to generate 0.91 times more return on investment than DAWSON GEOPHYSICAL. However, Burlington Stores is 1.1 times less risky than DAWSON GEOPHYSICAL. It trades about 0.41 of its potential returns per unit of risk. DAWSON GEOPHYSICAL is currently generating about 0.19 per unit of risk. If you would invest 24,600 in Burlington Stores on September 14, 2024 and sell it today you would earn a total of 3,600 from holding Burlington Stores or generate 14.63% 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. DAWSON GEOPHYSICAL
Performance |
| Timeline |
| Burlington Stores |
| DAWSON GEOPHYSICAL |
Burlington Stores and DAWSON GEOPHYSICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Burlington Stores and DAWSON GEOPHYSICAL
The main advantage of trading using opposite Burlington Stores and DAWSON GEOPHYSICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burlington Stores position performs unexpectedly, DAWSON GEOPHYSICAL 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 DAWSON GEOPHYSICAL will offset losses from the drop in DAWSON GEOPHYSICAL's long position.| Burlington Stores vs. Dairy Farm International | Burlington Stores vs. Ryanair Holdings plc | Burlington Stores vs. Norwegian Air Shuttle | Burlington Stores vs. Corsair Gaming |
| DAWSON GEOPHYSICAL vs. BJs Wholesale Club | DAWSON GEOPHYSICAL vs. Singapore Telecommunications Limited | DAWSON GEOPHYSICAL vs. Mobilezone Holding AG | DAWSON GEOPHYSICAL 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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