Correlation Between Burlington Stores and Mitsubishi Gas
Can any of the company-specific risk be diversified away by investing in both Burlington Stores and Mitsubishi Gas 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 Mitsubishi Gas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Burlington Stores and Mitsubishi Gas Chemical, you can compare the effects of market volatilities on Burlington Stores and Mitsubishi Gas 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 Mitsubishi Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burlington Stores and Mitsubishi Gas.
Diversification Opportunities for Burlington Stores and Mitsubishi Gas
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Burlington and Mitsubishi is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Burlington Stores and Mitsubishi Gas Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitsubishi Gas Chemical 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 Mitsubishi Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitsubishi Gas Chemical has no effect on the direction of Burlington Stores i.e., Burlington Stores and Mitsubishi Gas go up and down completely randomly.
Pair Corralation between Burlington Stores and Mitsubishi Gas
Assuming the 90 days trading horizon Burlington Stores is expected to generate 1.28 times more return on investment than Mitsubishi Gas. However, Burlington Stores is 1.28 times more volatile than Mitsubishi Gas Chemical. It trades about 0.0 of its potential returns per unit of risk. Mitsubishi Gas Chemical is currently generating about -0.05 per unit of risk. If you would invest 27,200 in Burlington Stores on October 30, 2024 and sell it today you would lose (200.00) from holding Burlington Stores or give up 0.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Burlington Stores vs. Mitsubishi Gas Chemical
Performance |
| Timeline |
| Burlington Stores |
| Mitsubishi Gas Chemical |
Burlington Stores and Mitsubishi Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Burlington Stores and Mitsubishi Gas
The main advantage of trading using opposite Burlington Stores and Mitsubishi Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burlington Stores position performs unexpectedly, Mitsubishi Gas 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 Mitsubishi Gas will offset losses from the drop in Mitsubishi Gas' 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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