Correlation Between Build A and CSS Industries
Can any of the company-specific risk be diversified away by investing in both Build A and CSS Industries 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 Build A and CSS Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Build A Bear Workshop and CSS Industries, you can compare the effects of market volatilities on Build A and CSS Industries 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 Build A with a short position of CSS Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Build A and CSS Industries.
Diversification Opportunities for Build A and CSS Industries
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Build and CSS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Build A Bear Workshop and CSS Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSS Industries and Build A 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 Build A Bear Workshop are associated (or correlated) with CSS Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSS Industries has no effect on the direction of Build A i.e., Build A and CSS Industries go up and down completely randomly.
Pair Corralation between Build A and CSS Industries
If you would invest 1,818 in Build A Bear Workshop on January 26, 2024 and sell it today you would earn a total of 1,158 from holding Build A Bear Workshop or generate 63.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Build A Bear Workshop vs. CSS Industries
Performance |
| Timeline |
| Build A Bear |
| CSS Industries |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Build A and CSS Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Build A and CSS Industries
The main advantage of trading using opposite Build A and CSS Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Build A position performs unexpectedly, CSS Industries 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 CSS Industries will offset losses from the drop in CSS Industries' long position.The idea behind Build A Bear Workshop and CSS Industries 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.| CSS Industries vs. LuxUrban Hotels 1300 | CSS Industries vs. One Group Hospitality | CSS Industries vs. Transphorm Technology | CSS Industries vs. Entegris |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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