Correlation Between GPS Old and Burlington Stores

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

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

Diversification Opportunities for GPS Old and Burlington Stores

0.0

Correlation Coefficient

GPS Old  Burlington Stores

Pay attention - limited upside

The 3 months correlation between GPS and Burlington is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GPS Old and Burlington Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burlington Stores and GPS Old 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 GPS Old 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 GPS Old i.e., GPS Old and Burlington Stores go up and down completely randomly.

Pair Corralation between GPS Old and Burlington Stores

If you would invest (100.00) in GPS Old on December 29, 2024 and sell it today you would earn a total of  100.00  from holding GPS Old or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

GPS Old  vs.  Burlington Stores

GPS Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days GPS Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, GPS Old is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

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. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with GPS Old and Burlington Stores

The main advantage of trading using opposite GPS Old and Burlington Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GPS Old 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 GPS Old 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.