Correlation Between First Republic and Burlington Stores
Can any of the company-specific risk be diversified away by investing in both First Republic 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 First Republic and Burlington Stores into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Republic Bank and Burlington Stores, you can compare the effects of market volatilities on First Republic 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 First Republic with a short position of Burlington Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Republic and Burlington Stores.
Diversification Opportunities for First Republic and Burlington Stores
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and Burlington is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding First Republic Bank and Burlington Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burlington Stores and First Republic 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 First Republic Bank 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 First Republic i.e., First Republic and Burlington Stores go up and down completely randomly.
Pair Corralation between First Republic and Burlington Stores
If you would invest 434,000 in Burlington Stores on August 31, 2024 and sell it today you would earn a total of 160,200 from holding Burlington Stores or generate 36.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Republic Bank vs. Burlington Stores
Performance |
| Timeline |
| First Republic Bank |
| Burlington Stores |
First Republic and Burlington Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Republic and Burlington Stores
The main advantage of trading using opposite First Republic and Burlington Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Republic 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.| First Republic vs. Grupo Financiero Banorte | First Republic vs. Grupo Financiero Inbursa | First Republic vs. Banco del Bajo |
| Burlington Stores vs. First Majestic Silver | Burlington Stores vs. Grupo Sports World | Burlington Stores vs. Verizon Communications | Burlington Stores vs. New Oriental Education |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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