Correlation Between Burlington Stores and Orbia Advance
Can any of the company-specific risk be diversified away by investing in both Burlington Stores and Orbia Advance 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 Orbia Advance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Burlington Stores and Orbia Advance, you can compare the effects of market volatilities on Burlington Stores and Orbia Advance 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 Orbia Advance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burlington Stores and Orbia Advance.
Diversification Opportunities for Burlington Stores and Orbia Advance
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Burlington and Orbia is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Burlington Stores and Orbia Advance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orbia Advance 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 Orbia Advance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orbia Advance has no effect on the direction of Burlington Stores i.e., Burlington Stores and Orbia Advance go up and down completely randomly.
Pair Corralation between Burlington Stores and Orbia Advance
Assuming the 90 days trading horizon Burlington Stores is expected to generate 1.76 times more return on investment than Orbia Advance. However, Burlington Stores is 1.76 times more volatile than Orbia Advance. It trades about 0.03 of its potential returns per unit of risk. Orbia Advance is currently generating about -0.08 per unit of risk. If you would invest 434,000 in Burlington Stores on November 2, 2024 and sell it today you would earn a total of 160,200 from holding Burlington Stores or generate 36.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Burlington Stores vs. Orbia Advance
Performance |
| Timeline |
| Burlington Stores |
| Orbia Advance |
Burlington Stores and Orbia Advance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Burlington Stores and Orbia Advance
The main advantage of trading using opposite Burlington Stores and Orbia Advance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burlington Stores position performs unexpectedly, Orbia Advance 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 Orbia Advance will offset losses from the drop in Orbia Advance's long position.| Burlington Stores vs. Walmart | Burlington Stores vs. Costco Wholesale | Burlington Stores vs. Target | Burlington Stores vs. Dollar Tree |
| Orbia Advance vs. Promotora y Operadora | Orbia Advance vs. Banco del Bajo | Orbia Advance vs. ALPEK SAB de | Orbia Advance vs. Nemak S A |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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