Correlation Between Burlington Stores and 87612GAC5

Can any of the company-specific risk be diversified away by investing in both Burlington Stores and 87612GAC5 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 87612GAC5 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Burlington Stores and TRGP 6125 15 MAR 33, you can compare the effects of market volatilities on Burlington Stores and 87612GAC5 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 87612GAC5. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burlington Stores and 87612GAC5.

Diversification Opportunities for Burlington Stores and 87612GAC5

-0.36

Correlation Coefficient

Burlington Stores  87612GAC5

Very good diversification

The 3 months correlation between Burlington and 87612GAC5 is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Burlington Stores and TRGP 6125 15 MAR 33 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRGP 6125 15 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 87612GAC5. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRGP 6125 15 has no effect on the direction of Burlington Stores i.e., Burlington Stores and 87612GAC5 go up and down completely randomly.

Pair Corralation between Burlington Stores and 87612GAC5

Given the investment horizon of 90 days Burlington Stores is expected to generate 1.96 times more return on investment than 87612GAC5. However, Burlington Stores is 1.96 times more volatile than TRGP 6125 15 MAR 33. It trades about 0.06 of its potential returns per unit of risk. TRGP 6125 15 MAR 33 is currently generating about -0.04 per unit of risk. If you would invest  27,529  in Burlington Stores on September 12, 2024 and sell it today you would earn a total of  1,498  from holding Burlington Stores or generate 5.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.63%
Values	Daily Returns

Burlington Stores  vs.  TRGP 6125 15 MAR 33

Burlington Stores

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Burlington Stores are ranked lower than 4 (%) 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 latest stock price mess, may contribute to short-term losses for the institutional investors.

TRGP 6125 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TRGP 6125 15 MAR 33 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 87612GAC5 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Burlington Stores and 87612GAC5

The main advantage of trading using opposite Burlington Stores and 87612GAC5 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burlington Stores position performs unexpectedly, 87612GAC5 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 87612GAC5 will offset losses from the drop in 87612GAC5's long position.

The idea behind Burlington Stores and TRGP 6125 15 MAR 33 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.