Correlation Between BURLINGTON STORES and FLOW TRADERS
Can any of the company-specific risk be diversified away by investing in both BURLINGTON STORES and FLOW TRADERS 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 FLOW TRADERS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BURLINGTON STORES and FLOW TRADERS LTD, you can compare the effects of market volatilities on BURLINGTON STORES and FLOW TRADERS 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 FLOW TRADERS. Check out your portfolio center. Please also check ongoing floating volatility patterns of BURLINGTON STORES and FLOW TRADERS.
Diversification Opportunities for BURLINGTON STORES and FLOW TRADERS
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between BURLINGTON and FLOW is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding BURLINGTON STORES and FLOW TRADERS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FLOW TRADERS LTD 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 FLOW TRADERS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FLOW TRADERS LTD has no effect on the direction of BURLINGTON STORES i.e., BURLINGTON STORES and FLOW TRADERS go up and down completely randomly.
Pair Corralation between BURLINGTON STORES and FLOW TRADERS
Assuming the 90 days trading horizon BURLINGTON STORES is expected to generate 1.12 times less return on investment than FLOW TRADERS. In addition to that, BURLINGTON STORES is 1.54 times more volatile than FLOW TRADERS LTD. It trades about 0.12 of its total potential returns per unit of risk. FLOW TRADERS LTD is currently generating about 0.21 per unit of volatility. If you would invest 1,789 in FLOW TRADERS LTD on September 10, 2024 and sell it today you would earn a total of 339.00 from holding FLOW TRADERS LTD or generate 18.95% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 98.48% |
Values | Daily Returns |
BURLINGTON STORES vs. FLOW TRADERS LTD
Performance |
Timeline |
BURLINGTON STORES |
FLOW TRADERS LTD |
BURLINGTON STORES and FLOW TRADERS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BURLINGTON STORES and FLOW TRADERS
The main advantage of trading using opposite BURLINGTON STORES and FLOW TRADERS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BURLINGTON STORES position performs unexpectedly, FLOW TRADERS 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 FLOW TRADERS will offset losses from the drop in FLOW TRADERS'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 |
FLOW TRADERS vs. MIRAMAR HOTEL INV | FLOW TRADERS vs. Highlight Communications AG | FLOW TRADERS vs. INTERSHOP Communications Aktiengesellschaft | FLOW TRADERS vs. T MOBILE US |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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