Correlation Between Burlington Stores and SCANSOURCE
Can any of the company-specific risk be diversified away by investing in both Burlington Stores and SCANSOURCE 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 SCANSOURCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Burlington Stores and SCANSOURCE, you can compare the effects of market volatilities on Burlington Stores and SCANSOURCE 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 SCANSOURCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burlington Stores and SCANSOURCE.
Diversification Opportunities for Burlington Stores and SCANSOURCE
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Burlington and SCANSOURCE is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Burlington Stores and SCANSOURCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCANSOURCE 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 SCANSOURCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCANSOURCE has no effect on the direction of Burlington Stores i.e., Burlington Stores and SCANSOURCE go up and down completely randomly.
Pair Corralation between Burlington Stores and SCANSOURCE
Assuming the 90 days trading horizon Burlington Stores is expected to generate 1.13 times less return on investment than SCANSOURCE. But when comparing it to its historical volatility, Burlington Stores is 1.32 times less risky than SCANSOURCE. It trades about 0.32 of its potential returns per unit of risk. SCANSOURCE is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 3,960 in SCANSOURCE on August 30, 2024 and sell it today you would earn a total of 800.00 from holding SCANSOURCE or generate 20.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Burlington Stores vs. SCANSOURCE
Performance |
| Timeline |
| Burlington Stores |
| SCANSOURCE |
Burlington Stores and SCANSOURCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Burlington Stores and SCANSOURCE
The main advantage of trading using opposite Burlington Stores and SCANSOURCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burlington Stores position performs unexpectedly, SCANSOURCE 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 SCANSOURCE will offset losses from the drop in SCANSOURCE's long position.| Burlington Stores vs. Apple Inc | Burlington Stores vs. Apple Inc | Burlington Stores vs. Apple Inc | Burlington Stores vs. Apple Inc |
| SCANSOURCE vs. Apple Inc | SCANSOURCE vs. Apple Inc | SCANSOURCE vs. Superior Plus Corp | SCANSOURCE vs. SIVERS SEMICONDUCTORS AB |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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