Correlation Between Freds and Burlington Stores
Can any of the company-specific risk be diversified away by investing in both Freds 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 Freds and Burlington Stores into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Freds Inc and Burlington Stores, you can compare the effects of market volatilities on Freds 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 Freds with a short position of Burlington Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freds and Burlington Stores.
Diversification Opportunities for Freds and Burlington Stores
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Freds and Burlington is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Freds Inc and Burlington Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burlington Stores and Freds 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 Freds Inc 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 Freds i.e., Freds and Burlington Stores go up and down completely randomly.
Pair Corralation between Freds and Burlington Stores
If you would invest (100.00) in Freds Inc on January 26, 2024 and sell it today you would earn a total of 100.00 from holding Freds Inc 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 |
Freds Inc vs. Burlington Stores
Performance |
| Timeline |
| Freds Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Burlington Stores |
Freds and Burlington Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Freds and Burlington Stores
The main advantage of trading using opposite Freds and Burlington Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freds 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.| Freds vs. Procter Gamble | Freds vs. Lincoln Electric Holdings | Freds vs. Church Dwight | Freds vs. Summit Materials |
| Burlington Stores vs. The TJX Companies | Burlington Stores vs. Guess Inc | Burlington Stores vs. Urban Outfitters | Burlington Stores vs. Childrens Place |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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