Correlation Between Burlington Stores and Carters
Can any of the company-specific risk be diversified away by investing in both Burlington Stores and Carters 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 Carters into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Burlington Stores and Carters, you can compare the effects of market volatilities on Burlington Stores and Carters 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 Carters. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burlington Stores and Carters.
Diversification Opportunities for Burlington Stores and Carters
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Burlington and Carters is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Burlington Stores and Carters in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carters 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 Carters. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carters has no effect on the direction of Burlington Stores i.e., Burlington Stores and Carters go up and down completely randomly.
Pair Corralation between Burlington Stores and Carters
Given the investment horizon of 90 days Burlington Stores is expected to generate 0.71 times more return on investment than Carters. However, Burlington Stores is 1.4 times less risky than Carters. It trades about 0.06 of its potential returns per unit of risk. Carters is currently generating about -0.1 per unit of risk. If you would invest 26,535 in Burlington Stores on September 2, 2024 and sell it today you would earn a total of 1,653 from holding Burlington Stores or generate 6.23% 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. Carters
Performance |
| Timeline |
| Burlington Stores |
| Carters |
Burlington Stores and Carters Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Burlington Stores and Carters
The main advantage of trading using opposite Burlington Stores and Carters positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burlington Stores position performs unexpectedly, Carters 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 Carters will offset losses from the drop in Carters' long position.| Burlington Stores vs. The TJX Companies | Burlington Stores vs. Guess Inc | Burlington Stores vs. Urban Outfitters | Burlington Stores vs. Childrens Place |
| Carters vs. Childrens Place | Carters vs. Gildan Activewear | Carters vs. Oxford Industries | Carters vs. Columbia Sportswear |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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