Correlation Between Burlington Stores and Playa Hotels
Can any of the company-specific risk be diversified away by investing in both Burlington Stores and Playa Hotels 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 Playa Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Burlington Stores and Playa Hotels Resorts, you can compare the effects of market volatilities on Burlington Stores and Playa Hotels 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 Playa Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burlington Stores and Playa Hotels.
Diversification Opportunities for Burlington Stores and Playa Hotels
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Burlington and Playa is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Burlington Stores and Playa Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playa Hotels Resorts 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 Playa Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playa Hotels Resorts has no effect on the direction of Burlington Stores i.e., Burlington Stores and Playa Hotels go up and down completely randomly.
Pair Corralation between Burlington Stores and Playa Hotels
Given the investment horizon of 90 days Burlington Stores is expected to generate 1.19 times less return on investment than Playa Hotels. In addition to that, Burlington Stores is 1.34 times more volatile than Playa Hotels Resorts. It trades about 0.04 of its total potential returns per unit of risk. Playa Hotels Resorts is currently generating about 0.07 per unit of volatility. If you would invest 575.00 in Playa Hotels Resorts on August 28, 2024 and sell it today you would earn a total of 415.00 from holding Playa Hotels Resorts or generate 72.17% 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. Playa Hotels Resorts
Performance |
| Timeline |
| Burlington Stores |
| Playa Hotels Resorts |
Burlington Stores and Playa Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Burlington Stores and Playa Hotels
The main advantage of trading using opposite Burlington Stores and Playa Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burlington Stores position performs unexpectedly, Playa Hotels 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 Playa Hotels will offset losses from the drop in Playa Hotels' long position.| Burlington Stores vs. The TJX Companies | Burlington Stores vs. Guess Inc | Burlington Stores vs. Urban Outfitters | Burlington Stores vs. Childrens Place |
| Playa Hotels vs. Yatra Online | Playa Hotels vs. Mondee Holdings | Playa Hotels vs. TripAdvisor | Playa Hotels vs. Thayer Ventures Acquisition |
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.
Other Complementary Tools
| Positions Ratings 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 | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |