Correlation Between Capri Holdings and Burlington Stores

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

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

Diversification Opportunities for Capri Holdings and Burlington Stores

0.69

Correlation Coefficient

Capri Holdings  Burlington Stores

Poor diversification

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

Pair Corralation between Capri Holdings and Burlington Stores

Given the investment horizon of 90 days Capri Holdings is expected to generate 1.31 times less return on investment than Burlington Stores. In addition to that, Capri Holdings is 1.16 times more volatile than Burlington Stores. It trades about 0.07 of its total potential returns per unit of risk. Burlington Stores is currently generating about 0.1 per unit of volatility. If you would invest  23,704  in Burlington Stores on May 4, 2025 and sell it today you would earn a total of  3,614  from holding Burlington Stores or generate 15.25% return on investment over 90 days.

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

Capri Holdings  vs.  Burlington Stores

Capri Holdings

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Capri Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Capri Holdings may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Burlington Stores

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Burlington Stores are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain basic indicators, Burlington Stores disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Capri Holdings and Burlington Stores

The main advantage of trading using opposite Capri Holdings and Burlington Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capri Holdings 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 Capri Holdings 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.