Correlation Between Burlington Stores and Enlight Renewable
Can any of the company-specific risk be diversified away by investing in both Burlington Stores and Enlight Renewable 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 Enlight Renewable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Burlington Stores and Enlight Renewable Energy, you can compare the effects of market volatilities on Burlington Stores and Enlight Renewable 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 Enlight Renewable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burlington Stores and Enlight Renewable.
Diversification Opportunities for Burlington Stores and Enlight Renewable
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Burlington and Enlight is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Burlington Stores and Enlight Renewable Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enlight Renewable Energy 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 Enlight Renewable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enlight Renewable Energy has no effect on the direction of Burlington Stores i.e., Burlington Stores and Enlight Renewable go up and down completely randomly.
Pair Corralation between Burlington Stores and Enlight Renewable
Given the investment horizon of 90 days Burlington Stores is expected to generate 36.33 times less return on investment than Enlight Renewable. But when comparing it to its historical volatility, Burlington Stores is 21.84 times less risky than Enlight Renewable. It trades about 0.03 of its potential returns per unit of risk. Enlight Renewable Energy is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,980 in Enlight Renewable Energy on September 26, 2024 and sell it today you would lose (340.00) from holding Enlight Renewable Energy or give up 17.17% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Burlington Stores vs. Enlight Renewable Energy
Performance |
Timeline |
Burlington Stores |
Enlight Renewable Energy |
Burlington Stores and Enlight Renewable Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Burlington Stores and Enlight Renewable
The main advantage of trading using opposite Burlington Stores and Enlight Renewable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burlington Stores position performs unexpectedly, Enlight Renewable 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 Enlight Renewable will offset losses from the drop in Enlight Renewable's long position.Burlington Stores vs. Macys Inc | Burlington Stores vs. Wayfair | Burlington Stores vs. 1StdibsCom | Burlington Stores vs. AutoNation |
Enlight Renewable vs. Burlington Stores | Enlight Renewable vs. Summit Materials | Enlight Renewable vs. Ross Stores | Enlight Renewable vs. Chipotle Mexican Grill |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |