Correlation Between SINGAPORE AIRLINES and Burlington Stores

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

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

Diversification Opportunities for SINGAPORE AIRLINES and Burlington Stores

0.23

Correlation Coefficient

SINGAPORE AIRLINES  Burlington Stores

Modest diversification

The 3 months correlation between SINGAPORE and Burlington is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding SINGAPORE AIRLINES and Burlington Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burlington Stores and SINGAPORE AIRLINES 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 SINGAPORE AIRLINES 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 SINGAPORE AIRLINES i.e., SINGAPORE AIRLINES and Burlington Stores go up and down completely randomly.

Pair Corralation between SINGAPORE AIRLINES and Burlington Stores

Assuming the 90 days trading horizon SINGAPORE AIRLINES is expected to generate 1.94 times less return on investment than Burlington Stores. But when comparing it to its historical volatility, SINGAPORE AIRLINES is 2.73 times less risky than Burlington Stores. It trades about 0.2 of its potential returns per unit of risk. Burlington Stores is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  19,000  in Burlington Stores on April 24, 2025 and sell it today you would earn a total of  4,000  from holding Burlington Stores or generate 21.05% return on investment over 90 days.

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

SINGAPORE AIRLINES  vs.  Burlington Stores

SINGAPORE AIRLINES

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SINGAPORE AIRLINES are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, SINGAPORE AIRLINES may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Burlington Stores

Risk-Adjusted Performance

Good

Over the last 90 days Burlington Stores has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly weak basic indicators, Burlington Stores reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SINGAPORE AIRLINES and Burlington Stores

The main advantage of trading using opposite SINGAPORE AIRLINES and Burlington Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SINGAPORE AIRLINES 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 SINGAPORE AIRLINES 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.