Correlation Between Burlington Stores and THAI BEVERAGE
Can any of the company-specific risk be diversified away by investing in both Burlington Stores and THAI BEVERAGE 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 THAI BEVERAGE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Burlington Stores and THAI BEVERAGE, you can compare the effects of market volatilities on Burlington Stores and THAI BEVERAGE 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 THAI BEVERAGE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burlington Stores and THAI BEVERAGE.
Diversification Opportunities for Burlington Stores and THAI BEVERAGE
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Burlington and THAI is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Burlington Stores and THAI BEVERAGE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THAI 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 THAI BEVERAGE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THAI BEVERAGE has no effect on the direction of Burlington Stores i.e., Burlington Stores and THAI BEVERAGE go up and down completely randomly.
Pair Corralation between Burlington Stores and THAI BEVERAGE
Assuming the 90 days trading horizon Burlington Stores is expected to generate 0.74 times more return on investment than THAI BEVERAGE. However, Burlington Stores is 1.36 times less risky than THAI BEVERAGE. It trades about 0.12 of its potential returns per unit of risk. THAI BEVERAGE is currently generating about 0.06 per unit of risk. If you would invest 24,000 in Burlington Stores on August 30, 2024 and sell it today you would earn a total of 3,400 from holding Burlington Stores or generate 14.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Burlington Stores vs. THAI BEVERAGE
Performance |
| Timeline |
| Burlington Stores |
| THAI BEVERAGE |
Burlington Stores and THAI BEVERAGE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Burlington Stores and THAI BEVERAGE
The main advantage of trading using opposite Burlington Stores and THAI BEVERAGE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burlington Stores position performs unexpectedly, THAI BEVERAGE 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 THAI BEVERAGE will offset losses from the drop in THAI BEVERAGE's long position.| Burlington Stores vs. Pebblebrook Hotel Trust | Burlington Stores vs. IMPERIAL TOBACCO | Burlington Stores vs. Choice Hotels International | Burlington Stores vs. MELIA HOTELS |
| THAI BEVERAGE vs. SCOTT TECHNOLOGY | THAI BEVERAGE vs. X Fab Silicon | THAI BEVERAGE vs. Media and Games | THAI BEVERAGE vs. GAMING FAC SA |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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