Correlation Between Hibbett Sports and Burlington Stores
Can any of the company-specific risk be diversified away by investing in both Hibbett Sports 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 Hibbett Sports and Burlington Stores into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hibbett Sports and Burlington Stores, you can compare the effects of market volatilities on Hibbett Sports 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 Hibbett Sports with a short position of Burlington Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hibbett Sports and Burlington Stores.
Diversification Opportunities for Hibbett Sports and Burlington Stores
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hibbett and Burlington is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Hibbett Sports and Burlington Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burlington Stores and Hibbett Sports 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 Hibbett Sports 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 Hibbett Sports i.e., Hibbett Sports and Burlington Stores go up and down completely randomly.
Pair Corralation between Hibbett Sports and Burlington Stores
Given the investment horizon of 90 days Hibbett Sports is expected to generate 1.2 times more return on investment than Burlington Stores. However, Hibbett Sports is 1.2 times more volatile than Burlington Stores. It trades about 0.04 of its potential returns per unit of risk. Burlington Stores is currently generating about 0.04 per unit of risk. If you would invest 6,261 in Hibbett Sports on August 24, 2024 and sell it today you would earn a total of 2,488 from holding Hibbett Sports or generate 39.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 83.03% |
| Values | Daily Returns |
Hibbett Sports vs. Burlington Stores
Performance |
| Timeline |
| Hibbett Sports |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Burlington Stores |
Hibbett Sports and Burlington Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hibbett Sports and Burlington Stores
The main advantage of trading using opposite Hibbett Sports and Burlington Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hibbett Sports 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.| Hibbett Sports vs. Big 5 Sporting | Hibbett Sports vs. Genesco | Hibbett Sports vs. Shoe Carnival | Hibbett Sports vs. MarineMax |
| Burlington Stores vs. Ross Stores | Burlington Stores vs. Childrens Place | Burlington Stores vs. Guess Inc | Burlington Stores vs. Cato Corporation |
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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