Correlation Between BURLINGTON STORES and MINCO SILVER

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

Diversification Opportunities for BURLINGTON STORES and MINCO SILVER

0.36

Correlation Coefficient

BURLINGTON STORES  MINCO SILVER

Weak diversification

The 3 months correlation between BURLINGTON and MINCO is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding BURLINGTON STORES and MINCO SILVER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MINCO 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 MINCO SILVER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MINCO SILVER has no effect on the direction of BURLINGTON STORES i.e., BURLINGTON STORES and MINCO SILVER go up and down completely randomly.

Pair Corralation between BURLINGTON STORES and MINCO SILVER

Assuming the 90 days trading horizon BURLINGTON STORES is expected to generate 0.41 times more return on investment than MINCO SILVER. However, BURLINGTON STORES is 2.45 times less risky than MINCO SILVER. It trades about -0.08 of its potential returns per unit of risk. MINCO SILVER is currently generating about -0.08 per unit of risk. If you would invest  28,200  in BURLINGTON STORES on September 27, 2024 and sell it today you would lose (800.00) from holding BURLINGTON STORES or give up 2.84% of portfolio value over 90 days.

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

BURLINGTON STORES  vs.  MINCO SILVER

BURLINGTON STORES

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BURLINGTON STORES are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain forward indicators, BURLINGTON STORES may actually be approaching a critical reversion point that can send shares even higher in January 2025.

MINCO SILVER

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MINCO SILVER are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental indicators, MINCO SILVER unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BURLINGTON STORES and MINCO SILVER

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

The idea behind BURLINGTON STORES and MINCO 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.

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.