Correlation Between ULTRA CLEAN and BURLINGTON STORES
Can any of the company-specific risk be diversified away by investing in both ULTRA CLEAN 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 ULTRA CLEAN and BURLINGTON STORES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ULTRA CLEAN HLDGS and BURLINGTON STORES, you can compare the effects of market volatilities on ULTRA CLEAN 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 ULTRA CLEAN with a short position of BURLINGTON STORES. Check out your portfolio center. Please also check ongoing floating volatility patterns of ULTRA CLEAN and BURLINGTON STORES.
Diversification Opportunities for ULTRA CLEAN and BURLINGTON STORES
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between ULTRA and BURLINGTON is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding ULTRA CLEAN HLDGS and BURLINGTON STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BURLINGTON STORES and ULTRA CLEAN 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 ULTRA CLEAN HLDGS 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 ULTRA CLEAN i.e., ULTRA CLEAN and BURLINGTON STORES go up and down completely randomly.
Pair Corralation between ULTRA CLEAN and BURLINGTON STORES
Assuming the 90 days trading horizon ULTRA CLEAN is expected to generate 2.32 times less return on investment than BURLINGTON STORES. In addition to that, ULTRA CLEAN is 1.4 times more volatile than BURLINGTON STORES. It trades about 0.05 of its total potential returns per unit of risk. BURLINGTON STORES is currently generating about 0.16 per unit of volatility. If you would invest 23,600 in BURLINGTON STORES on September 3, 2024 and sell it today you would earn a total of 3,600 from holding BURLINGTON STORES or generate 15.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ULTRA CLEAN HLDGS vs. BURLINGTON STORES
Performance |
| Timeline |
| ULTRA CLEAN HLDGS |
| BURLINGTON STORES |
ULTRA CLEAN and BURLINGTON STORES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ULTRA CLEAN and BURLINGTON STORES
The main advantage of trading using opposite ULTRA CLEAN and BURLINGTON STORES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ULTRA CLEAN 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.| ULTRA CLEAN vs. TOTAL GABON | ULTRA CLEAN vs. Walgreens Boots Alliance | ULTRA CLEAN vs. Peak Resources Limited |
| BURLINGTON STORES vs. ULTRA CLEAN HLDGS | BURLINGTON STORES vs. Clean Energy Fuels | BURLINGTON STORES vs. COSTCO WHOLESALE CDR | BURLINGTON STORES vs. PICKN PAY STORES |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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