Correlation Between ENELIM and Burlington Stores

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

By analyzing existing cross correlation between ENELIM 71 14 OCT 27 and Burlington Stores, you can compare the effects of market volatilities on ENELIM 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 ENELIM with a short position of Burlington Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENELIM and Burlington Stores.

Diversification Opportunities for ENELIM and Burlington Stores

-0.56

Correlation Coefficient

ENELIM  Burlington Stores

Excellent diversification

The 3 months correlation between ENELIM and Burlington is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding ENELIM 71 14 OCT 27 and Burlington Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burlington Stores and ENELIM 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 ENELIM 71 14 OCT 27 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 ENELIM i.e., ENELIM and Burlington Stores go up and down completely randomly.

Pair Corralation between ENELIM and Burlington Stores

Assuming the 90 days trading horizon ENELIM is expected to generate 20.84 times less return on investment than Burlington Stores. But when comparing it to its historical volatility, ENELIM 71 14 OCT 27 is 4.31 times less risky than Burlington Stores. It trades about 0.01 of its potential returns per unit of risk. Burlington Stores is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  22,391  in Burlington Stores on September 27, 2024 and sell it today you would earn a total of  6,513  from holding Burlington Stores or generate 29.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	67.4%
Values	Daily Returns

ENELIM 71 14 OCT 27  vs.  Burlington Stores

ENELIM 71 14

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ENELIM 71 14 OCT 27 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, ENELIM 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

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Burlington Stores are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating basic indicators, Burlington Stores may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with ENELIM and Burlington Stores

The main advantage of trading using opposite ENELIM and Burlington Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENELIM 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 ENELIM 71 14 OCT 27 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.