Correlation Between Burlington Stores and Assurant
Can any of the company-specific risk be diversified away by investing in both Burlington Stores and Assurant 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 Assurant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Burlington Stores and Assurant, you can compare the effects of market volatilities on Burlington Stores and Assurant 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 Assurant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burlington Stores and Assurant.
Diversification Opportunities for Burlington Stores and Assurant
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Burlington and Assurant is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Burlington Stores and Assurant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assurant 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 Assurant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Assurant has no effect on the direction of Burlington Stores i.e., Burlington Stores and Assurant go up and down completely randomly.
Pair Corralation between Burlington Stores and Assurant
Given the investment horizon of 90 days Burlington Stores is expected to generate 1.38 times more return on investment than Assurant. However, Burlington Stores is 1.38 times more volatile than Assurant. It trades about 0.2 of its potential returns per unit of risk. Assurant is currently generating about -0.21 per unit of risk. If you would invest 27,180 in Burlington Stores on September 19, 2024 and sell it today you would earn a total of 2,150 from holding Burlington Stores or generate 7.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Burlington Stores vs. Assurant
Performance |
| Timeline |
| Burlington Stores |
| Assurant |
Burlington Stores and Assurant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Burlington Stores and Assurant
The main advantage of trading using opposite Burlington Stores and Assurant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burlington Stores position performs unexpectedly, Assurant 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 Assurant will offset losses from the drop in Assurant's long position.| Burlington Stores vs. Capri Holdings | Burlington Stores vs. Movado Group | Burlington Stores vs. Tapestry | Burlington Stores vs. Brilliant Earth Group |
| Assurant vs. Assured Guaranty | Assurant vs. Ambac Financial Group | Assurant vs. AMERISAFE | Assurant vs. Enact Holdings |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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