Correlation Between Hibbett Sports and Burlington Stores

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

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

Diversification Opportunities for Hibbett Sports and Burlington Stores

0.0

Correlation Coefficient

Hibbett Sports  Burlington Stores

Pay attention - limited upside

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

Pair Corralation between Hibbett Sports and Burlington Stores

If you would invest (100.00) in Hibbett Sports on November 27, 2024 and sell it today you would earn a total of  100.00  from holding Hibbett Sports 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

Hibbett Sports  vs.  Burlington Stores

Hibbett Sports

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hibbett Sports has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Hibbett Sports is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the 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 March 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Hibbett Sports and Burlington Stores

The main advantage of trading using opposite Hibbett Sports and Burlington Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hibbett Sports 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 Hibbett Sports 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.

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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.