Correlation Between Burlington Stores and Buckle
Can any of the company-specific risk be diversified away by investing in both Burlington Stores and Buckle 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 Buckle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Burlington Stores and Buckle Inc, you can compare the effects of market volatilities on Burlington Stores and Buckle 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 Buckle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burlington Stores and Buckle.
Diversification Opportunities for Burlington Stores and Buckle
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Burlington and Buckle is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Burlington Stores and Buckle Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Buckle Inc 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 Buckle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Buckle Inc has no effect on the direction of Burlington Stores i.e., Burlington Stores and Buckle go up and down completely randomly.
Pair Corralation between Burlington Stores and Buckle
Given the investment horizon of 90 days Burlington Stores is expected to generate 1.24 times more return on investment than Buckle. However, Burlington Stores is 1.24 times more volatile than Buckle Inc. It trades about 0.04 of its potential returns per unit of risk. Buckle Inc is currently generating about 0.04 per unit of risk. If you would invest 20,026 in Burlington Stores on August 24, 2024 and sell it today you would earn a total of 7,260 from holding Burlington Stores or generate 36.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Burlington Stores vs. Buckle Inc
Performance |
| Timeline |
| Burlington Stores |
| Buckle Inc |
Burlington Stores and Buckle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Burlington Stores and Buckle
The main advantage of trading using opposite Burlington Stores and Buckle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burlington Stores position performs unexpectedly, Buckle 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 Buckle will offset losses from the drop in Buckle's long position.| Burlington Stores vs. Ross Stores | Burlington Stores vs. Childrens Place | Burlington Stores vs. Guess Inc | Burlington Stores vs. Cato Corporation |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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