Correlation Between Burlington Stores and Jutal Offshore

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Can any of the company-specific risk be diversified away by investing in both Burlington Stores and Jutal Offshore 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 Burlington Stores and Jutal Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Burlington Stores and Jutal Offshore Oil, you can compare the effects of market volatilities on Burlington Stores and Jutal Offshore 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 Burlington Stores with a short position of Jutal Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burlington Stores and Jutal Offshore.

Diversification Opportunities for Burlington Stores and Jutal Offshore

-0.64
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Burlington and Jutal is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Burlington Stores and Jutal Offshore Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jutal Offshore Oil and Burlington Stores 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 Burlington Stores are associated (or correlated) with Jutal Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jutal Offshore Oil has no effect on the direction of Burlington Stores i.e., Burlington Stores and Jutal Offshore go up and down completely randomly.

Pair Corralation between Burlington Stores and Jutal Offshore

Given the investment horizon of 90 days Burlington Stores is expected to under-perform the Jutal Offshore. In addition to that, Burlington Stores is 26.48 times more volatile than Jutal Offshore Oil. It trades about -0.06 of its total potential returns per unit of risk. Jutal Offshore Oil is currently generating about -0.22 per unit of volatility. If you would invest  1,910  in Jutal Offshore Oil on September 24, 2024 and sell it today you would lose (5.00) from holding Jutal Offshore Oil or give up 0.26% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Burlington Stores  vs.  Jutal Offshore Oil

 Performance 
       Timeline  
Burlington Stores 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Burlington Stores are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Burlington Stores is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.
Jutal Offshore Oil 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Jutal Offshore Oil has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Jutal Offshore is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Burlington Stores and Jutal Offshore Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Burlington Stores and Jutal Offshore

The main advantage of trading using opposite Burlington Stores and Jutal Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burlington Stores position performs unexpectedly, Jutal Offshore 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 Jutal Offshore will offset losses from the drop in Jutal Offshore's long position.
The idea behind Burlington Stores and Jutal Offshore Oil 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.
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.

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