Correlation Between Burlington Stores and Ark Restaurants
Can any of the company-specific risk be diversified away by investing in both Burlington Stores and Ark Restaurants 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 Ark Restaurants into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Burlington Stores and Ark Restaurants Corp, you can compare the effects of market volatilities on Burlington Stores and Ark Restaurants 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 Ark Restaurants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burlington Stores and Ark Restaurants.
Diversification Opportunities for Burlington Stores and Ark Restaurants
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Burlington and Ark is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Burlington Stores and Ark Restaurants Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ark Restaurants Corp 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 Ark Restaurants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ark Restaurants Corp has no effect on the direction of Burlington Stores i.e., Burlington Stores and Ark Restaurants go up and down completely randomly.
Pair Corralation between Burlington Stores and Ark Restaurants
Given the investment horizon of 90 days Burlington Stores is expected to under-perform the Ark Restaurants. But the stock apears to be less risky and, when comparing its historical volatility, Burlington Stores is 2.41 times less risky than Ark Restaurants. The stock trades about -0.18 of its potential returns per unit of risk. The Ark Restaurants Corp is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 1,276 in Ark Restaurants Corp on December 3, 2024 and sell it today you would lose (191.00) from holding Ark Restaurants Corp or give up 14.97% 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. Ark Restaurants Corp
Performance |
Timeline |
Burlington Stores |
Ark Restaurants Corp |
Burlington Stores and Ark Restaurants Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Burlington Stores and Ark Restaurants
The main advantage of trading using opposite Burlington Stores and Ark Restaurants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burlington Stores position performs unexpectedly, Ark Restaurants 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 Ark Restaurants will offset losses from the drop in Ark Restaurants' long position.Burlington Stores vs. The TJX Companies | Burlington Stores vs. Guess Inc | Burlington Stores vs. Urban Outfitters | Burlington Stores vs. Childrens Place |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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