Correlation Between Platinum Group and BURLINGTON STORES
Can any of the company-specific risk be diversified away by investing in both Platinum Group 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 Platinum Group and BURLINGTON STORES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Platinum Group Metals and BURLINGTON STORES, you can compare the effects of market volatilities on Platinum Group 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 Platinum Group with a short position of BURLINGTON STORES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum Group and BURLINGTON STORES.
Diversification Opportunities for Platinum Group and BURLINGTON STORES
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Platinum and BURLINGTON is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Group Metals and BURLINGTON STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BURLINGTON STORES and Platinum Group 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 Platinum Group Metals 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 Platinum Group i.e., Platinum Group and BURLINGTON STORES go up and down completely randomly.
Pair Corralation between Platinum Group and BURLINGTON STORES
Assuming the 90 days trading horizon Platinum Group Metals is expected to under-perform the BURLINGTON STORES. In addition to that, Platinum Group is 4.19 times more volatile than BURLINGTON STORES. It trades about -0.12 of its total potential returns per unit of risk. BURLINGTON STORES is currently generating about 0.04 per unit of volatility. If you would invest 27,600 in BURLINGTON STORES on October 7, 2024 and sell it today you would earn a total of 200.00 from holding BURLINGTON STORES or generate 0.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Platinum Group Metals vs. BURLINGTON STORES
Performance |
| Timeline |
| Platinum Group Metals |
| BURLINGTON STORES |
Platinum Group and BURLINGTON STORES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Platinum Group and BURLINGTON STORES
The main advantage of trading using opposite Platinum Group and BURLINGTON STORES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Platinum Group 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's long position.| Platinum Group vs. Genertec Universal Medical | Platinum Group vs. Compugroup Medical SE | Platinum Group vs. CHINA SOUTHN AIR H | Platinum Group vs. IMAGIN MEDICAL INC |
| BURLINGTON STORES vs. MAG SILVER | BURLINGTON STORES vs. GALENA MINING LTD | BURLINGTON STORES vs. Eurasia Mining Plc | BURLINGTON STORES vs. NTT DATA |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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