Correlation Between BURLINGTON STORES and Strer SE

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Can any of the company-specific risk be diversified away by investing in both BURLINGTON STORES and Strer SE 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 Strer SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BURLINGTON STORES and Strer SE Co, you can compare the effects of market volatilities on BURLINGTON STORES and Strer SE 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 Strer SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of BURLINGTON STORES and Strer SE.

Diversification Opportunities for BURLINGTON STORES and Strer SE

BURLINGTONStrerDiversified AwayBURLINGTONStrerDiversified Away100%
-0.11
  Correlation Coefficient

Good diversification

The 3 months correlation between BURLINGTON and Strer is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding BURLINGTON STORES and Strer SE Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strer SE 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 Strer SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strer SE has no effect on the direction of BURLINGTON STORES i.e., BURLINGTON STORES and Strer SE go up and down completely randomly.

Pair Corralation between BURLINGTON STORES and Strer SE

Assuming the 90 days trading horizon BURLINGTON STORES is expected to under-perform the Strer SE. But the stock apears to be less risky and, when comparing its historical volatility, BURLINGTON STORES is 1.6 times less risky than Strer SE. The stock trades about -0.06 of its potential returns per unit of risk. The Strer SE Co is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  4,842  in Strer SE Co on November 18, 2024 and sell it today you would earn a total of  868.00  from holding Strer SE Co or generate 17.93% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

BURLINGTON STORES  vs.  Strer SE Co

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -10-5051015
JavaScript chart by amCharts 3.21.15BUI SAX
       Timeline  
BURLINGTON STORES 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days BURLINGTON STORES has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's forward indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb235240245250255260265270275280
Strer SE 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Strer SE Co are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Strer SE unveiled solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb46485052545658

BURLINGTON STORES and Strer SE Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.79-2.09-1.39-0.690.00.691.382.072.77 0.060.080.100.12
JavaScript chart by amCharts 3.21.15BUI SAX
       Returns  

Pair Trading with BURLINGTON STORES and Strer SE

The main advantage of trading using opposite BURLINGTON STORES and Strer SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BURLINGTON STORES position performs unexpectedly, Strer SE 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 Strer SE will offset losses from the drop in Strer SE's long position.
The idea behind BURLINGTON STORES and Strer SE Co 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.
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.

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