Correlation Between Burlington Stores and GoHealth
Can any of the company-specific risk be diversified away by investing in both Burlington Stores and GoHealth 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 GoHealth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Burlington Stores and GoHealth, you can compare the effects of market volatilities on Burlington Stores and GoHealth 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 GoHealth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burlington Stores and GoHealth.
Diversification Opportunities for Burlington Stores and GoHealth
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Burlington and GoHealth is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Burlington Stores and GoHealth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoHealth 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 GoHealth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoHealth has no effect on the direction of Burlington Stores i.e., Burlington Stores and GoHealth go up and down completely randomly.
Pair Corralation between Burlington Stores and GoHealth
Given the investment horizon of 90 days Burlington Stores is expected to generate 1.81 times less return on investment than GoHealth. But when comparing it to its historical volatility, Burlington Stores is 2.15 times less risky than GoHealth. It trades about 0.04 of its potential returns per unit of risk. GoHealth is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,041 in GoHealth on September 19, 2024 and sell it today you would earn a total of 190.00 from holding GoHealth or generate 18.25% 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. GoHealth
Performance |
| Timeline |
| Burlington Stores |
| GoHealth |
Burlington Stores and GoHealth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Burlington Stores and GoHealth
The main advantage of trading using opposite Burlington Stores and GoHealth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burlington Stores position performs unexpectedly, GoHealth 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 GoHealth will offset losses from the drop in GoHealth's long position.| Burlington Stores vs. Capri Holdings | Burlington Stores vs. Movado Group | Burlington Stores vs. Tapestry | Burlington Stores vs. Brilliant Earth Group |
| GoHealth vs. eHealth | GoHealth vs. Tian Ruixiang Holdings | GoHealth vs. Huize Holding | GoHealth vs. Selectquote |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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