Correlation Between VERIZON and Burlington Stores
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By analyzing existing cross correlation between VERIZON MUNICATIONS INC and Burlington Stores, you can compare the effects of market volatilities on VERIZON 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 VERIZON with a short position of Burlington Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of VERIZON and Burlington Stores.
Diversification Opportunities for VERIZON and Burlington Stores
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between VERIZON and Burlington is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding VERIZON MUNICATIONS INC and Burlington Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burlington Stores and VERIZON 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 VERIZON MUNICATIONS INC 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 VERIZON i.e., VERIZON and Burlington Stores go up and down completely randomly.
Pair Corralation between VERIZON and Burlington Stores
Assuming the 90 days trading horizon VERIZON is expected to generate 4.47 times less return on investment than Burlington Stores. But when comparing it to its historical volatility, VERIZON MUNICATIONS INC is 1.8 times less risky than Burlington Stores. It trades about 0.02 of its potential returns per unit of risk. Burlington Stores is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 26,535 in Burlington Stores on September 2, 2024 and sell it today you would earn a total of 1,653 from holding Burlington Stores or generate 6.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.88% |
| Values | Daily Returns |
VERIZON MUNICATIONS INC vs. Burlington Stores
Performance |
| Timeline |
| VERIZON MUNICATIONS INC |
| Burlington Stores |
VERIZON and Burlington Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VERIZON and Burlington Stores
The main advantage of trading using opposite VERIZON and Burlington Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VERIZON 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.| VERIZON vs. AEP TEX INC | VERIZON vs. US BANK NATIONAL | VERIZON vs. Bank of America | VERIZON vs. GE Aerospace |
| 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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