Correlation Between Vince Holding and Burlington Stores
Can any of the company-specific risk be diversified away by investing in both Vince Holding 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 Vince Holding and Burlington Stores into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vince Holding Corp and Burlington Stores, you can compare the effects of market volatilities on Vince Holding 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 Vince Holding with a short position of Burlington Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vince Holding and Burlington Stores.
Diversification Opportunities for Vince Holding and Burlington Stores
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vince and Burlington is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Vince Holding Corp and Burlington Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burlington Stores and Vince Holding 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 Vince Holding Corp 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 Vince Holding i.e., Vince Holding and Burlington Stores go up and down completely randomly.
Pair Corralation between Vince Holding and Burlington Stores
Given the investment horizon of 90 days Vince Holding Corp is expected to under-perform the Burlington Stores. In addition to that, Vince Holding is 2.4 times more volatile than Burlington Stores. It trades about -0.03 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 20,026 in Burlington Stores on August 25, 2024 and sell it today you would earn a total of 8,586 from holding Burlington Stores or generate 42.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.4% |
| Values | Daily Returns |
Vince Holding Corp vs. Burlington Stores
Performance |
| Timeline |
| Vince Holding Corp |
| Burlington Stores |
Vince Holding and Burlington Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vince Holding and Burlington Stores
The main advantage of trading using opposite Vince Holding and Burlington Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vince Holding 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.| Vince Holding vs. Ermenegildo Zegna NV | Vince Holding vs. Columbia Sportswear | Vince Holding vs. Gildan Activewear | Vince Holding vs. G III Apparel Group |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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