Correlation Between Silo Pharma and Burlington Stores

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

By analyzing existing cross correlation between Silo Pharma and Burlington Stores, you can compare the effects of market volatilities on Silo Pharma 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 Silo Pharma with a short position of Burlington Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silo Pharma and Burlington Stores.

Diversification Opportunities for Silo Pharma and Burlington Stores

-0.62

Correlation Coefficient

Silo Pharma  Burlington Stores

Excellent diversification

The 3 months correlation between Silo and Burlington is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Silo Pharma and Burlington Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burlington Stores and Silo Pharma 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 Silo Pharma 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 Silo Pharma i.e., Silo Pharma and Burlington Stores go up and down completely randomly.

Pair Corralation between Silo Pharma and Burlington Stores

Given the investment horizon of 90 days Silo Pharma is expected to generate 7.42 times more return on investment than Burlington Stores. However, Silo Pharma is 7.42 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 0.1 per unit of risk. If you would invest  105.00  in Silo Pharma on September 15, 2024 and sell it today you would lose (13.00) from holding Silo Pharma or give up 12.38% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Silo Pharma  vs.  Burlington Stores

Silo Pharma

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Silo Pharma has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's essential indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Burlington Stores

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Burlington Stores are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent basic indicators, Burlington Stores may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Silo Pharma and Burlington Stores

The main advantage of trading using opposite Silo Pharma and Burlington Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silo Pharma 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 Silo Pharma 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.

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.