Correlation Between Burlington Stores and GOLD FIELDS

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

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

Diversification Opportunities for Burlington Stores and GOLD FIELDS

-0.4

Correlation Coefficient

Burlington Stores  GOLD FIELDS

Very good diversification

The 3 months correlation between Burlington and GOLD is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Burlington Stores and GOLD FIELDS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOLD FIELDS and Burlington Stores 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 Burlington Stores are associated (or correlated) with GOLD FIELDS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GOLD FIELDS has no effect on the direction of Burlington Stores i.e., Burlington Stores and GOLD FIELDS go up and down completely randomly.

Pair Corralation between Burlington Stores and GOLD FIELDS

Assuming the 90 days trading horizon Burlington Stores is expected to generate 0.91 times more return on investment than GOLD FIELDS. However, Burlington Stores is 1.1 times less risky than GOLD FIELDS. It trades about 0.12 of its potential returns per unit of risk. GOLD FIELDS is currently generating about 0.06 per unit of risk. If you would invest  19,500  in Burlington Stores on April 24, 2025 and sell it today you would earn a total of  3,900  from holding Burlington Stores or generate 20.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Burlington Stores  vs.  GOLD FIELDS

Burlington Stores

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Burlington Stores are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Burlington Stores unveiled solid returns over the last few months and may actually be approaching a breakup point.

GOLD FIELDS

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in GOLD FIELDS are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, GOLD FIELDS may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Burlington Stores and GOLD FIELDS

The main advantage of trading using opposite Burlington Stores and GOLD FIELDS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Burlington Stores position performs unexpectedly, GOLD FIELDS 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 GOLD FIELDS will offset losses from the drop in GOLD FIELDS's long position.

The idea behind Burlington Stores and GOLD FIELDS 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.