Correlation Between SunOpta and Burlington Stores
Can any of the company-specific risk be diversified away by investing in both SunOpta 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 SunOpta and Burlington Stores into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SunOpta and Burlington Stores, you can compare the effects of market volatilities on SunOpta 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 SunOpta with a short position of Burlington Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunOpta and Burlington Stores.
Diversification Opportunities for SunOpta and Burlington Stores
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SunOpta and Burlington is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding SunOpta and Burlington Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burlington Stores and SunOpta 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 SunOpta 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 SunOpta i.e., SunOpta and Burlington Stores go up and down completely randomly.
Pair Corralation between SunOpta and Burlington Stores
Given the investment horizon of 90 days SunOpta is expected to generate 1.24 times more return on investment than Burlington Stores. However, SunOpta is 1.24 times more volatile than Burlington Stores. It trades about 0.32 of its potential returns per unit of risk. Burlington Stores is currently generating about 0.37 per unit of risk. If you would invest 675.00 in SunOpta on September 3, 2024 and sell it today you would earn a total of 100.00 from holding SunOpta or generate 14.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SunOpta vs. Burlington Stores
Performance |
| Timeline |
| SunOpta |
| Burlington Stores |
SunOpta and Burlington Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SunOpta and Burlington Stores
The main advantage of trading using opposite SunOpta and Burlington Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunOpta 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.| SunOpta vs. Seneca Foods Corp | SunOpta vs. Central Garden Pet | SunOpta vs. Central Garden Pet | SunOpta vs. Natures Sunshine Products |
| 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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