Correlation Between Virco Manufacturing and Burlington Stores
Can any of the company-specific risk be diversified away by investing in both Virco Manufacturing 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 Virco Manufacturing and Burlington Stores into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virco Manufacturing and Burlington Stores, you can compare the effects of market volatilities on Virco Manufacturing 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 Virco Manufacturing with a short position of Burlington Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virco Manufacturing and Burlington Stores.
Diversification Opportunities for Virco Manufacturing and Burlington Stores
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Virco and Burlington is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Virco Manufacturing and Burlington Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burlington Stores and Virco Manufacturing 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 Virco Manufacturing 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 Virco Manufacturing i.e., Virco Manufacturing and Burlington Stores go up and down completely randomly.
Pair Corralation between Virco Manufacturing and Burlington Stores
Given the investment horizon of 90 days Virco Manufacturing is expected to generate 1.68 times more return on investment than Burlington Stores. However, Virco Manufacturing is 1.68 times more volatile than Burlington Stores. It trades about 0.08 of its potential returns per unit of risk. Burlington Stores is currently generating about 0.03 per unit of risk. If you would invest 480.00 in Virco Manufacturing on September 4, 2024 and sell it today you would earn a total of 1,185 from holding Virco Manufacturing or generate 246.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virco Manufacturing vs. Burlington Stores
Performance |
| Timeline |
| Virco Manufacturing |
| Burlington Stores |
Virco Manufacturing and Burlington Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virco Manufacturing and Burlington Stores
The main advantage of trading using opposite Virco Manufacturing and Burlington Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virco Manufacturing 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.| Virco Manufacturing vs. Genpact Limited | Virco Manufacturing vs. Broadridge Financial Solutions | Virco Manufacturing vs. BrightView Holdings | Virco Manufacturing vs. First Advantage Corp |
| 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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