Correlation Between PENN Entertainment, and Burlington Stores,

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

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

Diversification Opportunities for PENN Entertainment, and Burlington Stores,

0.69

Correlation Coefficient

PENN Entertainment,  Burlington Stores,

Poor diversification

The 3 months correlation between PENN and Burlington is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding PENN Entertainment, and Burlington Stores, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burlington Stores, and PENN Entertainment, 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 PENN Entertainment, 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 PENN Entertainment, i.e., PENN Entertainment, and Burlington Stores, go up and down completely randomly.

Pair Corralation between PENN Entertainment, and Burlington Stores,

Assuming the 90 days trading horizon PENN Entertainment, is expected to under-perform the Burlington Stores,. But the stock apears to be less risky and, when comparing its historical volatility, PENN Entertainment, is 1.48 times less risky than Burlington Stores,. The stock trades about -0.01 of its potential returns per unit of risk. The Burlington Stores, is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  4,000  in Burlington Stores, on October 5, 2024 and sell it today you would earn a total of  1,916  from holding Burlington Stores, or generate 47.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	85.1%
Values	Daily Returns

PENN Entertainment,  vs.  Burlington Stores,

PENN Entertainment,

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PENN Entertainment, are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, PENN Entertainment, sustained solid returns over the last few months and may actually be approaching a breakup point.

Burlington Stores,

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Burlington Stores, are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Burlington Stores, sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PENN Entertainment, and Burlington Stores,

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

The idea behind PENN Entertainment, 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.