Correlation Between Zedge and Burlington Stores
Can any of the company-specific risk be diversified away by investing in both Zedge 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 Zedge and Burlington Stores into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zedge Inc and Burlington Stores, you can compare the effects of market volatilities on Zedge 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 Zedge with a short position of Burlington Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zedge and Burlington Stores.
Diversification Opportunities for Zedge and Burlington Stores
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Zedge and Burlington is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Zedge Inc and Burlington Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burlington Stores and Zedge 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 Zedge 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 Zedge i.e., Zedge and Burlington Stores go up and down completely randomly.
Pair Corralation between Zedge and Burlington Stores
Given the investment horizon of 90 days Zedge Inc is expected to generate 2.6 times more return on investment than Burlington Stores. However, Zedge is 2.6 times more volatile than Burlington Stores. It trades about 0.04 of its potential returns per unit of risk. Burlington Stores is currently generating about 0.09 per unit of risk. If you would invest 228.00 in Zedge Inc on September 14, 2024 and sell it today you would earn a total of 45.00 from holding Zedge Inc or generate 19.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zedge Inc vs. Burlington Stores
Performance |
| Timeline |
| Zedge Inc |
| Burlington Stores |
Zedge and Burlington Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zedge and Burlington Stores
The main advantage of trading using opposite Zedge and Burlington Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zedge 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.The idea behind Zedge Inc and Burlington Stores pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Burlington Stores vs. Capri Holdings | Burlington Stores vs. Movado Group | Burlington Stores vs. Tapestry | Burlington Stores vs. Brilliant Earth 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |