Correlation Between Burlington Stores and MOLSON COORS
Can any of the company-specific risk be diversified away by investing in both Burlington Stores and MOLSON COORS 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 MOLSON COORS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Burlington Stores and MOLSON RS BEVERAGE, you can compare the effects of market volatilities on Burlington Stores and MOLSON COORS 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 MOLSON COORS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burlington Stores and MOLSON COORS.
Diversification Opportunities for Burlington Stores and MOLSON COORS
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Burlington and MOLSON is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Burlington Stores and MOLSON RS BEVERAGE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOLSON RS BEVERAGE 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 MOLSON COORS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOLSON RS BEVERAGE has no effect on the direction of Burlington Stores i.e., Burlington Stores and MOLSON COORS go up and down completely randomly.
Pair Corralation between Burlington Stores and MOLSON COORS
Assuming the 90 days trading horizon Burlington Stores is expected to generate 2.29 times more return on investment than MOLSON COORS. However, Burlington Stores is 2.29 times more volatile than MOLSON RS BEVERAGE. It trades about 0.28 of its potential returns per unit of risk. MOLSON RS BEVERAGE is currently generating about 0.41 per unit of risk. If you would invest 23,600 in Burlington Stores on September 1, 2024 and sell it today you would earn a total of 3,600 from holding Burlington Stores or generate 15.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Burlington Stores vs. MOLSON RS BEVERAGE
Performance |
| Timeline |
| Burlington Stores |
| MOLSON RS BEVERAGE |
Burlington Stores and MOLSON COORS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Burlington Stores and MOLSON COORS
The main advantage of trading using opposite Burlington Stores and MOLSON COORS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burlington Stores position performs unexpectedly, MOLSON COORS 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 MOLSON COORS will offset losses from the drop in MOLSON COORS's long position.| Burlington Stores vs. Apple Inc | Burlington Stores vs. Apple Inc | Burlington Stores vs. Apple Inc | Burlington Stores vs. Apple Inc |
| MOLSON COORS vs. G8 EDUCATION | MOLSON COORS vs. TAL Education Group | MOLSON COORS vs. IDP EDUCATION LTD | MOLSON COORS vs. Xinhua Winshare Publishing |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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