Correlation Between Express and Burlington Stores
Can any of the company-specific risk be diversified away by investing in both Express 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 Express and Burlington Stores into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Express and Burlington Stores, you can compare the effects of market volatilities on Express 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 Express with a short position of Burlington Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of Express and Burlington Stores.
Diversification Opportunities for Express and Burlington Stores
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Express and Burlington is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Express and Burlington Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burlington Stores and Express 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 Express 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 Express i.e., Express and Burlington Stores go up and down completely randomly.
Pair Corralation between Express and Burlington Stores
Given the investment horizon of 90 days Express is expected to under-perform the Burlington Stores. In addition to that, Express is 2.12 times more volatile than Burlington Stores. It trades about 0.0 of its total potential returns per unit of risk. Burlington Stores is currently generating about 0.03 per unit of volatility. If you would invest 22,391 in Burlington Stores on August 28, 2024 and sell it today you would earn a total of 6,303 from holding Burlington Stores or generate 28.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 28.78% |
| Values | Daily Returns |
Express vs. Burlington Stores
Performance |
| Timeline |
| Express |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Burlington Stores |
Express and Burlington Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Express and Burlington Stores
The main advantage of trading using opposite Express and Burlington Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Express 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.| Express vs. Koss Corporation | Express vs. BlackBerry | Express vs. Castor Maritime | Express vs. Clover Health Investments |
| Burlington Stores vs. The TJX Companies | Burlington Stores vs. Guess Inc | Burlington Stores vs. Urban Outfitters | Burlington Stores vs. Childrens Place |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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