Correlation Between Burlington Stores and CAVA Group,
Can any of the company-specific risk be diversified away by investing in both Burlington Stores and CAVA Group, 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 CAVA Group, into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Burlington Stores and CAVA Group,, you can compare the effects of market volatilities on Burlington Stores and CAVA Group, 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 CAVA Group,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burlington Stores and CAVA Group,.
Diversification Opportunities for Burlington Stores and CAVA Group,
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Burlington and CAVA is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Burlington Stores and CAVA Group, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAVA Group, 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 CAVA Group,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAVA Group, has no effect on the direction of Burlington Stores i.e., Burlington Stores and CAVA Group, go up and down completely randomly.
Pair Corralation between Burlington Stores and CAVA Group,
Given the investment horizon of 90 days Burlington Stores is expected to generate 4.6 times less return on investment than CAVA Group,. But when comparing it to its historical volatility, Burlington Stores is 1.53 times less risky than CAVA Group,. It trades about 0.02 of its potential returns per unit of risk. CAVA Group, is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 4,378 in CAVA Group, on December 4, 2024 and sell it today you would earn a total of 4,387 from holding CAVA Group, or generate 100.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 87.02% |
| Values | Daily Returns |
Burlington Stores vs. CAVA Group,
Performance |
| Timeline |
| Burlington Stores |
| CAVA Group, |
Burlington Stores and CAVA Group, Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Burlington Stores and CAVA Group,
The main advantage of trading using opposite Burlington Stores and CAVA Group, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burlington Stores position performs unexpectedly, CAVA Group, 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 CAVA Group, will offset losses from the drop in CAVA Group,'s long position.| Burlington Stores vs. The TJX Companies | Burlington Stores vs. Guess Inc | Burlington Stores vs. Urban Outfitters | Burlington Stores vs. Childrens Place |
| CAVA Group, vs. Sphere 3D Corp | CAVA Group, vs. Cementos Pacasmayo SAA | CAVA Group, vs. Highway Holdings Limited | CAVA Group, vs. Everus Construction Group |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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