Correlation Between BURLINGTON STORES and Auto Trader
Can any of the company-specific risk be diversified away by investing in both BURLINGTON STORES and Auto Trader 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 Auto Trader into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BURLINGTON STORES and Auto Trader Group, you can compare the effects of market volatilities on BURLINGTON STORES and Auto Trader 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 Auto Trader. Check out your portfolio center. Please also check ongoing floating volatility patterns of BURLINGTON STORES and Auto Trader.
Diversification Opportunities for BURLINGTON STORES and Auto Trader
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BURLINGTON and Auto is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding BURLINGTON STORES and Auto Trader Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auto Trader Group 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 Auto Trader. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auto Trader Group has no effect on the direction of BURLINGTON STORES i.e., BURLINGTON STORES and Auto Trader go up and down completely randomly.
Pair Corralation between BURLINGTON STORES and Auto Trader
Assuming the 90 days trading horizon BURLINGTON STORES is expected to generate 1.39 times more return on investment than Auto Trader. However, BURLINGTON STORES is 1.39 times more volatile than Auto Trader Group. It trades about 0.13 of its potential returns per unit of risk. Auto Trader Group is currently generating about 0.0 per unit of risk. If you would invest 23,600 in BURLINGTON STORES on September 10, 2024 and sell it today you would earn a total of 4,000 from holding BURLINGTON STORES or generate 16.95% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
BURLINGTON STORES vs. Auto Trader Group
Performance |
Timeline |
BURLINGTON STORES |
Auto Trader Group |
BURLINGTON STORES and Auto Trader Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BURLINGTON STORES and Auto Trader
The main advantage of trading using opposite BURLINGTON STORES and Auto Trader positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BURLINGTON STORES position performs unexpectedly, Auto Trader 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 Auto Trader will offset losses from the drop in Auto Trader's long position.BURLINGTON STORES vs. X FAB Silicon Foundries | BURLINGTON STORES vs. DAIRY FARM INTL | BURLINGTON STORES vs. Hitachi Construction Machinery | BURLINGTON STORES vs. Daito Trust Construction |
Auto Trader vs. QUEEN S ROAD | Auto Trader vs. LANDSEA HOMES P | Auto Trader vs. Liberty Broadband | Auto Trader vs. TEXAS ROADHOUSE |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
Global Correlations Find global opportunities by holding instruments from different markets |