Correlation Between Burlington Stores, and Globus Medical,

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

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

Diversification Opportunities for Burlington Stores, and Globus Medical,

0.61

Correlation Coefficient

Burlington Stores,  Globus Medical,

Poor diversification

The 3 months correlation between Burlington and Globus is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Burlington Stores, and Globus Medical, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globus Medical, 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 Globus Medical,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globus Medical, has no effect on the direction of Burlington Stores, i.e., Burlington Stores, and Globus Medical, go up and down completely randomly.

Pair Corralation between Burlington Stores, and Globus Medical,

Assuming the 90 days trading horizon Burlington Stores, is expected to generate 1.0 times less return on investment than Globus Medical,. In addition to that, Burlington Stores, is 1.2 times more volatile than Globus Medical,. It trades about 0.14 of its total potential returns per unit of risk. Globus Medical, is currently generating about 0.17 per unit of volatility. If you would invest  4,900  in Globus Medical, on October 8, 2024 and sell it today you would earn a total of  1,356  from holding Globus Medical, or generate 27.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	42.79%
Values	Daily Returns

Burlington Stores,  vs.  Globus Medical,

Burlington Stores,

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Burlington Stores, are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Burlington Stores, sustained solid returns over the last few months and may actually be approaching a breakup point.

Globus Medical,

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Globus Medical, are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak primary indicators, Globus Medical, sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Burlington Stores, and Globus Medical,

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

The idea behind Burlington Stores, and Globus Medical, 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.