Correlation Between BURLINGTON STORES and EIDESVIK OFFSHORE

Can any of the company-specific risk be diversified away by investing in both BURLINGTON STORES and EIDESVIK 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 EIDESVIK 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 EIDESVIK OFFSHORE NK, you can compare the effects of market volatilities on BURLINGTON STORES and EIDESVIK 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 EIDESVIK OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of BURLINGTON STORES and EIDESVIK OFFSHORE.

Diversification Opportunities for BURLINGTON STORES and EIDESVIK OFFSHORE

-0.54

Correlation Coefficient

BURLINGTON STORES  EIDESVIK OFFSHORE

Excellent diversification

The 3 months correlation between BURLINGTON and EIDESVIK is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding BURLINGTON STORES and EIDESVIK OFFSHORE NK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EIDESVIK OFFSHORE 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 EIDESVIK OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EIDESVIK OFFSHORE has no effect on the direction of BURLINGTON STORES i.e., BURLINGTON STORES and EIDESVIK OFFSHORE go up and down completely randomly.

Pair Corralation between BURLINGTON STORES and EIDESVIK OFFSHORE

Assuming the 90 days trading horizon BURLINGTON STORES is expected to generate 1.64 times less return on investment than EIDESVIK OFFSHORE. But when comparing it to its historical volatility, BURLINGTON STORES is 1.31 times less risky than EIDESVIK OFFSHORE. It trades about 0.04 of its potential returns per unit of risk. EIDESVIK OFFSHORE NK is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  72.00  in EIDESVIK OFFSHORE NK on October 10, 2024 and sell it today you would earn a total of  42.00  from holding EIDESVIK OFFSHORE NK or generate 58.33% return on investment over 90 days.

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

BURLINGTON STORES  vs.  EIDESVIK OFFSHORE NK

BURLINGTON STORES

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BURLINGTON STORES are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain forward indicators, BURLINGTON STORES exhibited solid returns over the last few months and may actually be approaching a breakup point.

EIDESVIK OFFSHORE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EIDESVIK OFFSHORE NK has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, EIDESVIK OFFSHORE is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with BURLINGTON STORES and EIDESVIK OFFSHORE

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

The idea behind BURLINGTON STORES and EIDESVIK OFFSHORE NK 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.