Correlation Between FLOW TRADERS and BURLINGTON STORES
Can any of the company-specific risk be diversified away by investing in both FLOW TRADERS 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 FLOW TRADERS and BURLINGTON STORES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FLOW TRADERS LTD and BURLINGTON STORES, you can compare the effects of market volatilities on FLOW TRADERS 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 FLOW TRADERS with a short position of BURLINGTON STORES. Check out your portfolio center. Please also check ongoing floating volatility patterns of FLOW TRADERS and BURLINGTON STORES.
Diversification Opportunities for FLOW TRADERS and BURLINGTON STORES
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between FLOW and BURLINGTON is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding FLOW TRADERS LTD and BURLINGTON STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BURLINGTON STORES and FLOW TRADERS 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 FLOW TRADERS LTD 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 FLOW TRADERS i.e., FLOW TRADERS and BURLINGTON STORES go up and down completely randomly.
Pair Corralation between FLOW TRADERS and BURLINGTON STORES
Assuming the 90 days horizon FLOW TRADERS LTD is expected to generate 0.64 times more return on investment than BURLINGTON STORES. However, FLOW TRADERS LTD is 1.56 times less risky than BURLINGTON STORES. It trades about 0.21 of its potential returns per unit of risk. BURLINGTON STORES is currently generating about 0.1 per unit of risk. If you would invest 1,776 in FLOW TRADERS LTD on September 6, 2024 and sell it today you would earn a total of 340.00 from holding FLOW TRADERS LTD or generate 19.14% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
FLOW TRADERS LTD vs. BURLINGTON STORES
Performance |
Timeline |
FLOW TRADERS LTD |
BURLINGTON STORES |
FLOW TRADERS and BURLINGTON STORES Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with FLOW TRADERS and BURLINGTON STORES
The main advantage of trading using opposite FLOW TRADERS and BURLINGTON STORES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FLOW TRADERS 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's long position.FLOW TRADERS vs. DEVRY EDUCATION GRP | FLOW TRADERS vs. Gamma Communications plc | FLOW TRADERS vs. Spirent Communications plc | FLOW TRADERS vs. Adtalem Global Education |
BURLINGTON STORES vs. TOTAL GABON | BURLINGTON STORES vs. Walgreens Boots Alliance | BURLINGTON STORES vs. Peak Resources Limited |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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