Correlation Between BURLINGTON STORES and MAG SILVER

Can any of the company-specific risk be diversified away by investing in both BURLINGTON STORES and MAG SILVER 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 MAG SILVER into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BURLINGTON STORES and MAG SILVER, you can compare the effects of market volatilities on BURLINGTON STORES and MAG SILVER 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 MAG SILVER. Check out your portfolio center. Please also check ongoing floating volatility patterns of BURLINGTON STORES and MAG SILVER.

Diversification Opportunities for BURLINGTON STORES and MAG SILVER

-0.23

Correlation Coefficient

BURLINGTON STORES  MAG SILVER

Very good diversification

The 3 months correlation between BURLINGTON and MAG is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding BURLINGTON STORES and MAG SILVER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAG SILVER 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 MAG SILVER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAG SILVER has no effect on the direction of BURLINGTON STORES i.e., BURLINGTON STORES and MAG SILVER go up and down completely randomly.

Pair Corralation between BURLINGTON STORES and MAG SILVER

Assuming the 90 days trading horizon BURLINGTON STORES is expected to generate 0.62 times more return on investment than MAG SILVER. However, BURLINGTON STORES is 1.6 times less risky than MAG SILVER. It trades about 0.1 of its potential returns per unit of risk. MAG SILVER is currently generating about -0.13 per unit of risk. If you would invest  27,400  in BURLINGTON STORES on October 9, 2024 and sell it today you would earn a total of  600.00  from holding BURLINGTON STORES or generate 2.19% 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.  MAG SILVER

BURLINGTON STORES

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BURLINGTON STORES are ranked lower than 15 (%) 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.

MAG SILVER

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MAG SILVER are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, MAG SILVER is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with BURLINGTON STORES and MAG SILVER

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

The idea behind BURLINGTON STORES and MAG SILVER 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.