Correlation Between Burlington Stores and LAir Liquide
Can any of the company-specific risk be diversified away by investing in both Burlington Stores and LAir Liquide 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 LAir Liquide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Burlington Stores and LAir Liquide SA, you can compare the effects of market volatilities on Burlington Stores and LAir Liquide 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 LAir Liquide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burlington Stores and LAir Liquide.
Diversification Opportunities for Burlington Stores and LAir Liquide
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Burlington and LAir is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Burlington Stores and LAir Liquide SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LAir Liquide SA 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 LAir Liquide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LAir Liquide SA has no effect on the direction of Burlington Stores i.e., Burlington Stores and LAir Liquide go up and down completely randomly.
Pair Corralation between Burlington Stores and LAir Liquide
Given the investment horizon of 90 days Burlington Stores is expected to generate 1.09 times more return on investment than LAir Liquide. However, Burlington Stores is 1.09 times more volatile than LAir Liquide SA. It trades about 0.09 of its potential returns per unit of risk. LAir Liquide SA is currently generating about -0.04 per unit of risk. If you would invest 23,406 in Burlington Stores on September 1, 2024 and sell it today you would earn a total of 4,782 from holding Burlington Stores or generate 20.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Burlington Stores vs. LAir Liquide SA
Performance |
| Timeline |
| Burlington Stores |
| LAir Liquide SA |
Burlington Stores and LAir Liquide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Burlington Stores and LAir Liquide
The main advantage of trading using opposite Burlington Stores and LAir Liquide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burlington Stores position performs unexpectedly, LAir Liquide 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 LAir Liquide will offset losses from the drop in LAir Liquide's long position.| Burlington Stores vs. Capri Holdings | Burlington Stores vs. Movado Group | Burlington Stores vs. Tapestry | Burlington Stores vs. Brilliant Earth Group |
| LAir Liquide vs. Sherwin Williams Co | LAir Liquide vs. Air Liquide SA | LAir Liquide vs. Air Products and | LAir Liquide vs. Ecolab Inc |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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