Correlation Between Burlington Stores and Hibbett Sports
Can any of the company-specific risk be diversified away by investing in both Burlington Stores and Hibbett Sports 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 Hibbett Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Burlington Stores and Hibbett Sports, you can compare the effects of market volatilities on Burlington Stores and Hibbett Sports 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 Hibbett Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burlington Stores and Hibbett Sports.
Diversification Opportunities for Burlington Stores and Hibbett Sports
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Burlington and Hibbett is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Burlington Stores and Hibbett Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hibbett Sports 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 Hibbett Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hibbett Sports has no effect on the direction of Burlington Stores i.e., Burlington Stores and Hibbett Sports go up and down completely randomly.
Pair Corralation between Burlington Stores and Hibbett Sports
Given the investment horizon of 90 days Burlington Stores is expected to generate 1.15 times less return on investment than Hibbett Sports. But when comparing it to its historical volatility, Burlington Stores is 1.19 times less risky than Hibbett Sports. It trades about 0.04 of its potential returns per unit of risk. Hibbett Sports is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 6,402 in Hibbett Sports on August 27, 2024 and sell it today you would earn a total of 2,347 from holding Hibbett Sports or generate 36.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 82.66% |
| Values | Daily Returns |
Burlington Stores vs. Hibbett Sports
Performance |
| Timeline |
| Burlington Stores |
| Hibbett Sports |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Burlington Stores and Hibbett Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Burlington Stores and Hibbett Sports
The main advantage of trading using opposite Burlington Stores and Hibbett Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burlington Stores position performs unexpectedly, Hibbett Sports 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 Hibbett Sports will offset losses from the drop in Hibbett Sports' long position.| Burlington Stores vs. The TJX Companies | Burlington Stores vs. Guess Inc | Burlington Stores vs. Urban Outfitters | Burlington Stores vs. Childrens Place |
| Hibbett Sports vs. Big 5 Sporting | Hibbett Sports vs. Genesco | Hibbett Sports vs. Shoe Carnival | Hibbett Sports vs. MarineMax |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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