Correlation Between Burlington Stores and ITALIAN WINE
Can any of the company-specific risk be diversified away by investing in both Burlington Stores and ITALIAN WINE 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 ITALIAN WINE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Burlington Stores and ITALIAN WINE BRANDS, you can compare the effects of market volatilities on Burlington Stores and ITALIAN WINE 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 ITALIAN WINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burlington Stores and ITALIAN WINE.
Diversification Opportunities for Burlington Stores and ITALIAN WINE
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Burlington and ITALIAN is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Burlington Stores and ITALIAN WINE BRANDS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITALIAN WINE BRANDS 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 ITALIAN WINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITALIAN WINE BRANDS has no effect on the direction of Burlington Stores i.e., Burlington Stores and ITALIAN WINE go up and down completely randomly.
Pair Corralation between Burlington Stores and ITALIAN WINE
Assuming the 90 days trading horizon Burlington Stores is expected to generate 1.2 times more return on investment than ITALIAN WINE. However, Burlington Stores is 1.2 times more volatile than ITALIAN WINE BRANDS. It trades about 0.22 of its potential returns per unit of risk. ITALIAN WINE BRANDS is currently generating about -0.05 per unit of risk. If you would invest 23,400 in Burlington Stores on August 25, 2024 and sell it today you would earn a total of 2,600 from holding Burlington Stores or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Burlington Stores vs. ITALIAN WINE BRANDS
Performance |
| Timeline |
| Burlington Stores |
| ITALIAN WINE BRANDS |
Burlington Stores and ITALIAN WINE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Burlington Stores and ITALIAN WINE
The main advantage of trading using opposite Burlington Stores and ITALIAN WINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burlington Stores position performs unexpectedly, ITALIAN WINE 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 ITALIAN WINE will offset losses from the drop in ITALIAN WINE's long position.| Burlington Stores vs. Apple Inc | Burlington Stores vs. Apple Inc | Burlington Stores vs. Apple Inc | Burlington Stores vs. Apple Inc |
| ITALIAN WINE vs. Diageo plc | ITALIAN WINE vs. Superior Plus Corp | ITALIAN WINE vs. NMI Holdings | ITALIAN WINE vs. Origin Agritech |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |