Correlation Between Burlington Stores and Prospector Metals
Can any of the company-specific risk be diversified away by investing in both Burlington Stores and Prospector Metals 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 Prospector Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Burlington Stores and Prospector Metals Corp, you can compare the effects of market volatilities on Burlington Stores and Prospector Metals 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 Prospector Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burlington Stores and Prospector Metals.
Diversification Opportunities for Burlington Stores and Prospector Metals
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Burlington and Prospector is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Burlington Stores and Prospector Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prospector Metals Corp 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 Prospector Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prospector Metals Corp has no effect on the direction of Burlington Stores i.e., Burlington Stores and Prospector Metals go up and down completely randomly.
Pair Corralation between Burlington Stores and Prospector Metals
Given the investment horizon of 90 days Burlington Stores is expected to generate 2.65 times less return on investment than Prospector Metals. But when comparing it to its historical volatility, Burlington Stores is 4.6 times less risky than Prospector Metals. It trades about 0.04 of its potential returns per unit of risk. Prospector Metals Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 34.00 in Prospector Metals Corp on September 13, 2024 and sell it today you would lose (26.00) from holding Prospector Metals Corp or give up 76.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Burlington Stores vs. Prospector Metals Corp
Performance |
| Timeline |
| Burlington Stores |
| Prospector Metals Corp |
Burlington Stores and Prospector Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Burlington Stores and Prospector Metals
The main advantage of trading using opposite Burlington Stores and Prospector Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burlington Stores position performs unexpectedly, Prospector Metals 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 Prospector Metals will offset losses from the drop in Prospector Metals' long position.| Burlington Stores vs. The TJX Companies | Burlington Stores vs. Guess Inc | Burlington Stores vs. Urban Outfitters | Burlington Stores vs. Childrens Place |
| Prospector Metals vs. PVH Corp | Prospector Metals vs. Boot Barn Holdings | Prospector Metals vs. Burlington Stores | Prospector Metals vs. Lululemon Athletica |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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