Correlation Between Media and Burlington Stores
Can any of the company-specific risk be diversified away by investing in both Media 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 Media and Burlington Stores into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Media and Games and Burlington Stores, you can compare the effects of market volatilities on Media 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 Media with a short position of Burlington Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of Media and Burlington Stores.
Diversification Opportunities for Media and Burlington Stores
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Media and Burlington is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Media and Games and Burlington Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burlington Stores and Media 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 Media and Games 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 Media i.e., Media and Burlington Stores go up and down completely randomly.
Pair Corralation between Media and Burlington Stores
Assuming the 90 days trading horizon Media and Games is expected to generate 1.73 times more return on investment than Burlington Stores. However, Media is 1.73 times more volatile than Burlington Stores. It trades about 0.05 of its potential returns per unit of risk. Burlington Stores is currently generating about 0.04 per unit of risk. If you would invest 159.00 in Media and Games on October 16, 2024 and sell it today you would earn a total of 108.00 from holding Media and Games or generate 67.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Media and Games vs. Burlington Stores
Performance |
| Timeline |
| Media and Games |
| Burlington Stores |
Media and Burlington Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Media and Burlington Stores
The main advantage of trading using opposite Media and Burlington Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Media 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.| Media vs. Broadcom | Media vs. Broadwind | Media vs. TITANIUM TRANSPORTGROUP | Media vs. Yuexiu Transport Infrastructure |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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