Correlation Between Burlington Stores and Corporacion America
Can any of the company-specific risk be diversified away by investing in both Burlington Stores and Corporacion America 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 Corporacion America into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Burlington Stores and Corporacion America Airports, you can compare the effects of market volatilities on Burlington Stores and Corporacion America 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 Corporacion America. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burlington Stores and Corporacion America.
Diversification Opportunities for Burlington Stores and Corporacion America
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Burlington and Corporacion is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Burlington Stores and Corporacion America Airports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corporacion America 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 Corporacion America. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corporacion America has no effect on the direction of Burlington Stores i.e., Burlington Stores and Corporacion America go up and down completely randomly.
Pair Corralation between Burlington Stores and Corporacion America
Given the investment horizon of 90 days Burlington Stores is expected to generate 0.81 times more return on investment than Corporacion America. However, Burlington Stores is 1.24 times less risky than Corporacion America. It trades about 0.09 of its potential returns per unit of risk. Corporacion America Airports is currently generating about 0.02 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. Corporacion America Airports
Performance |
| Timeline |
| Burlington Stores |
| Corporacion America |
Burlington Stores and Corporacion America Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Burlington Stores and Corporacion America
The main advantage of trading using opposite Burlington Stores and Corporacion America positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burlington Stores position performs unexpectedly, Corporacion America 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 Corporacion America will offset losses from the drop in Corporacion America's long position.| Burlington Stores vs. Capri Holdings | Burlington Stores vs. Movado Group | Burlington Stores vs. Tapestry | Burlington Stores vs. Brilliant Earth Group |
| Corporacion America vs. Grupo Aeroportuario del | Corporacion America vs. Grupo Aeroportuario del | Corporacion America vs. AerSale Corp | Corporacion America vs. Flughafen Zrich AG |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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