Correlation Between Burlington Stores and Tianjin Capital
Can any of the company-specific risk be diversified away by investing in both Burlington Stores and Tianjin Capital 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 Tianjin Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Burlington Stores and Tianjin Capital Environmental, you can compare the effects of market volatilities on Burlington Stores and Tianjin Capital 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 Tianjin Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burlington Stores and Tianjin Capital.
Diversification Opportunities for Burlington Stores and Tianjin Capital
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Burlington and Tianjin is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Burlington Stores and Tianjin Capital Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tianjin Capital Envi 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 Tianjin Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tianjin Capital Envi has no effect on the direction of Burlington Stores i.e., Burlington Stores and Tianjin Capital go up and down completely randomly.
Pair Corralation between Burlington Stores and Tianjin Capital
Given the investment horizon of 90 days Burlington Stores is expected to generate 5.72 times less return on investment than Tianjin Capital. But when comparing it to its historical volatility, Burlington Stores is 5.6 times less risky than Tianjin Capital. It trades about 0.1 of its potential returns per unit of risk. Tianjin Capital Environmental is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 15.00 in Tianjin Capital Environmental on August 30, 2024 and sell it today you would earn a total of 23.00 from holding Tianjin Capital Environmental or generate 153.33% 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. Tianjin Capital Environmental
Performance |
| Timeline |
| Burlington Stores |
| Tianjin Capital Envi |
Burlington Stores and Tianjin Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Burlington Stores and Tianjin Capital
The main advantage of trading using opposite Burlington Stores and Tianjin Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burlington Stores position performs unexpectedly, Tianjin Capital 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 Tianjin Capital will offset losses from the drop in Tianjin Capital's long position.| Burlington Stores vs. The TJX Companies | Burlington Stores vs. Guess Inc | Burlington Stores vs. Urban Outfitters | Burlington Stores vs. Childrens Place |
| Tianjin Capital vs. Bright Scholar Education | Tianjin Capital vs. Universal Technical Institute | Tianjin Capital vs. Toro Co | Tianjin Capital vs. Ihuman Inc |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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