Correlation Between Cboe UK and Burberry Group
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By analyzing existing cross correlation between Cboe UK Consumer and Burberry Group PLC, you can compare the effects of market volatilities on Cboe UK and Burberry Group 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 Cboe UK with a short position of Burberry Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cboe UK and Burberry Group.
Diversification Opportunities for Cboe UK and Burberry Group
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cboe and Burberry is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Cboe UK Consumer and Burberry Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burberry Group PLC and Cboe UK 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 Cboe UK Consumer are associated (or correlated) with Burberry Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burberry Group PLC has no effect on the direction of Cboe UK i.e., Cboe UK and Burberry Group go up and down completely randomly.
Pair Corralation between Cboe UK and Burberry Group
Assuming the 90 days trading horizon Cboe UK is expected to generate 2.13 times less return on investment than Burberry Group. But when comparing it to its historical volatility, Cboe UK Consumer is 4.45 times less risky than Burberry Group. It trades about 0.28 of its potential returns per unit of risk. Burberry Group PLC is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 66,300 in Burberry Group PLC on August 31, 2024 and sell it today you would earn a total of 22,920 from holding Burberry Group PLC or generate 34.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cboe UK Consumer vs. Burberry Group PLC
Performance |
| Timeline |
Cboe UK and Burberry Group Volatility Contrast
Predicted Return Density |
| Returns |
Cboe UK Consumer
Pair trading matchups for Cboe UK
Burberry Group PLC
Pair trading matchups for Burberry Group
Pair Trading with Cboe UK and Burberry Group
The main advantage of trading using opposite Cboe UK and Burberry Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cboe UK position performs unexpectedly, Burberry Group 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 Burberry Group will offset losses from the drop in Burberry Group's long position.| Cboe UK vs. Lendinvest PLC | Cboe UK vs. Monster Beverage Corp | Cboe UK vs. Cembra Money Bank | Cboe UK vs. UNIQA Insurance Group |
| Burberry Group vs. SBM Offshore NV | Burberry Group vs. Charter Communications Cl | Burberry Group vs. Cairo Communication SpA | Burberry Group vs. Aeorema Communications Plc |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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