Correlation Between Burlington Stores and SunLink Health
Can any of the company-specific risk be diversified away by investing in both Burlington Stores and SunLink Health 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 SunLink Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Burlington Stores and SunLink Health Systems, you can compare the effects of market volatilities on Burlington Stores and SunLink Health 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 SunLink Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burlington Stores and SunLink Health.
Diversification Opportunities for Burlington Stores and SunLink Health
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Burlington and SunLink is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Burlington Stores and SunLink Health Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunLink Health Systems 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 SunLink Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SunLink Health Systems has no effect on the direction of Burlington Stores i.e., Burlington Stores and SunLink Health go up and down completely randomly.
Pair Corralation between Burlington Stores and SunLink Health
Given the investment horizon of 90 days Burlington Stores is expected to generate 0.38 times more return on investment than SunLink Health. However, Burlington Stores is 2.65 times less risky than SunLink Health. It trades about 0.37 of its potential returns per unit of risk. SunLink Health Systems is currently generating about 0.02 per unit of risk. If you would invest 24,725 in Burlington Stores on September 3, 2024 and sell it today you would earn a total of 3,463 from holding Burlington Stores or generate 14.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Burlington Stores vs. SunLink Health Systems
Performance |
| Timeline |
| Burlington Stores |
| SunLink Health Systems |
Burlington Stores and SunLink Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Burlington Stores and SunLink Health
The main advantage of trading using opposite Burlington Stores and SunLink Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burlington Stores position performs unexpectedly, SunLink Health 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 SunLink Health will offset losses from the drop in SunLink Health's long position.| Burlington Stores vs. The TJX Companies | Burlington Stores vs. Guess Inc | Burlington Stores vs. Urban Outfitters | Burlington Stores vs. Childrens Place |
| SunLink Health vs. Leafly Holdings | SunLink Health vs. Allstar Health Brands | SunLink Health vs. Leafly Holdings | SunLink Health vs. Kiaro Holdings Corp |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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