Correlation Between Duluth Holdings and Burlington Stores
Can any of the company-specific risk be diversified away by investing in both Duluth Holdings and Burlington Stores 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 Duluth Holdings and Burlington Stores into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Duluth Holdings and Burlington Stores, you can compare the effects of market volatilities on Duluth Holdings and Burlington Stores 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 Duluth Holdings with a short position of Burlington Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duluth Holdings and Burlington Stores.
Diversification Opportunities for Duluth Holdings and Burlington Stores
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Duluth and Burlington is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Duluth Holdings and Burlington Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burlington Stores and Duluth Holdings 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 Duluth Holdings are associated (or correlated) with Burlington Stores. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burlington Stores has no effect on the direction of Duluth Holdings i.e., Duluth Holdings and Burlington Stores go up and down completely randomly.
Pair Corralation between Duluth Holdings and Burlington Stores
Given the investment horizon of 90 days Duluth Holdings is expected to generate 2.98 times less return on investment than Burlington Stores. In addition to that, Duluth Holdings is 1.67 times more volatile than Burlington Stores. It trades about 0.07 of its total potential returns per unit of risk. Burlington Stores is currently generating about 0.33 per unit of volatility. If you would invest 24,777 in Burlington Stores on September 1, 2024 and sell it today you would earn a total of 3,411 from holding Burlington Stores or generate 13.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Duluth Holdings vs. Burlington Stores
Performance |
| Timeline |
| Duluth Holdings |
| Burlington Stores |
Duluth Holdings and Burlington Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Duluth Holdings and Burlington Stores
The main advantage of trading using opposite Duluth Holdings and Burlington Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duluth Holdings position performs unexpectedly, Burlington Stores 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 Burlington Stores will offset losses from the drop in Burlington Stores' long position.| Duluth Holdings vs. Capri Holdings | Duluth Holdings vs. Movado Group | Duluth Holdings vs. Tapestry | Duluth Holdings vs. Brilliant Earth Group |
| Burlington Stores vs. Capri Holdings | Burlington Stores vs. Movado Group | Burlington Stores vs. Tapestry | Burlington Stores vs. Brilliant Earth Group |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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