Correlation Between FibraHotel and Burlington Stores

Can any of the company-specific risk be diversified away by investing in both FibraHotel and Burlington Stores 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 FibraHotel and Burlington Stores into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FibraHotel and Burlington Stores, you can compare the effects of market volatilities on FibraHotel and Burlington Stores 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 FibraHotel with a short position of Burlington Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of FibraHotel and Burlington Stores.

Diversification Opportunities for FibraHotel and Burlington Stores

-0.28

Correlation Coefficient

FibraHotel  Burlington Stores

Very good diversification

The 3 months correlation between FibraHotel and Burlington is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding FibraHotel and Burlington Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burlington Stores and FibraHotel 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 FibraHotel are associated (or correlated) with Burlington Stores. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burlington Stores has no effect on the direction of FibraHotel i.e., FibraHotel and Burlington Stores go up and down completely randomly.

Pair Corralation between FibraHotel and Burlington Stores

Assuming the 90 days trading horizon FibraHotel is expected to generate 3.99 times more return on investment than Burlington Stores. However, FibraHotel is 3.99 times more volatile than Burlington Stores. It trades about 0.03 of its potential returns per unit of risk. Burlington Stores is currently generating about -0.13 per unit of risk. If you would invest  978.00  in FibraHotel on December 26, 2024 and sell it today you would earn a total of  28.00  from holding FibraHotel or generate 2.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

FibraHotel  vs.  Burlington Stores

FibraHotel

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FibraHotel are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical indicators, FibraHotel may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Burlington Stores

Risk-Adjusted Performance

Very Weak

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 weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with FibraHotel and Burlington Stores

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

The idea behind FibraHotel and Burlington Stores 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.

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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..