Correlation Between Burlington Stores and Tourmaline Bio
Can any of the company-specific risk be diversified away by investing in both Burlington Stores and Tourmaline Bio 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 Tourmaline Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Burlington Stores and Tourmaline Bio, you can compare the effects of market volatilities on Burlington Stores and Tourmaline Bio 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 Tourmaline Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burlington Stores and Tourmaline Bio.
Diversification Opportunities for Burlington Stores and Tourmaline Bio
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Burlington and Tourmaline is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Burlington Stores and Tourmaline Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tourmaline Bio 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 Tourmaline Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tourmaline Bio has no effect on the direction of Burlington Stores i.e., Burlington Stores and Tourmaline Bio go up and down completely randomly.
Pair Corralation between Burlington Stores and Tourmaline Bio
Given the investment horizon of 90 days Burlington Stores is expected to generate 4.63 times less return on investment than Tourmaline Bio. But when comparing it to its historical volatility, Burlington Stores is 2.09 times less risky than Tourmaline Bio. It trades about 0.04 of its potential returns per unit of risk. Tourmaline Bio is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 438.00 in Tourmaline Bio on September 14, 2024 and sell it today you would earn a total of 1,744 from holding Tourmaline Bio or generate 398.17% 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. Tourmaline Bio
Performance |
| Timeline |
| Burlington Stores |
| Tourmaline Bio |
Burlington Stores and Tourmaline Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Burlington Stores and Tourmaline Bio
The main advantage of trading using opposite Burlington Stores and Tourmaline Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burlington Stores position performs unexpectedly, Tourmaline Bio 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 Tourmaline Bio will offset losses from the drop in Tourmaline Bio's long position.| Burlington Stores vs. Capri Holdings | Burlington Stores vs. Movado Group | Burlington Stores vs. Tapestry | Burlington Stores vs. Brilliant Earth Group |
| Tourmaline Bio vs. Burlington Stores | Tourmaline Bio vs. Victorias Secret Co | Tourmaline Bio vs. Skechers USA | Tourmaline Bio vs. Estee Lauder Companies |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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