Correlation Between BURLINGTON STORES and FAST RETAIL
Can any of the company-specific risk be diversified away by investing in both BURLINGTON STORES and FAST RETAIL 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 FAST RETAIL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BURLINGTON STORES and FAST RETAIL ADR, you can compare the effects of market volatilities on BURLINGTON STORES and FAST RETAIL 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 FAST RETAIL. Check out your portfolio center. Please also check ongoing floating volatility patterns of BURLINGTON STORES and FAST RETAIL.
Diversification Opportunities for BURLINGTON STORES and FAST RETAIL
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BURLINGTON and FAST is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding BURLINGTON STORES and FAST RETAIL ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FAST RETAIL ADR 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 FAST RETAIL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FAST RETAIL ADR has no effect on the direction of BURLINGTON STORES i.e., BURLINGTON STORES and FAST RETAIL go up and down completely randomly.
Pair Corralation between BURLINGTON STORES and FAST RETAIL
Assuming the 90 days trading horizon BURLINGTON STORES is expected to generate 1.28 times less return on investment than FAST RETAIL. In addition to that, BURLINGTON STORES is 1.06 times more volatile than FAST RETAIL ADR. It trades about 0.12 of its total potential returns per unit of risk. FAST RETAIL ADR is currently generating about 0.17 per unit of volatility. If you would invest 2,680 in FAST RETAIL ADR on September 11, 2024 and sell it today you would earn a total of 580.00 from holding FAST RETAIL ADR or generate 21.64% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
BURLINGTON STORES vs. FAST RETAIL ADR
Performance |
Timeline |
BURLINGTON STORES |
FAST RETAIL ADR |
BURLINGTON STORES and FAST RETAIL Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BURLINGTON STORES and FAST RETAIL
The main advantage of trading using opposite BURLINGTON STORES and FAST RETAIL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BURLINGTON STORES position performs unexpectedly, FAST RETAIL 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 FAST RETAIL will offset losses from the drop in FAST RETAIL's long position.BURLINGTON STORES vs. THAI BEVERAGE | BURLINGTON STORES vs. Shin Etsu Chemical Co | BURLINGTON STORES vs. SENECA FOODS A | BURLINGTON STORES vs. KINGBOARD CHEMICAL |
FAST RETAIL vs. FARO Technologies | FAST RETAIL vs. The Hanover Insurance | FAST RETAIL vs. National Bank Holdings | FAST RETAIL vs. CHIBA BANK |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
Share Portfolio Track or share privately all of your investments from the convenience of any device | |
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
Equity Valuation Check real value of public entities based on technical and fundamental data | |
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |