Correlation Between Five Below and Build A
Can any of the company-specific risk be diversified away by investing in both Five Below and Build A 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 Five Below and Build A into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Five Below and Build A Bear Workshop, you can compare the effects of market volatilities on Five Below and Build A 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 Five Below with a short position of Build A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Five Below and Build A.
Diversification Opportunities for Five Below and Build A
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Five and Build is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Five Below and Build A Bear Workshop in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Build A Bear and Five Below 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 Five Below are associated (or correlated) with Build A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Build A Bear has no effect on the direction of Five Below i.e., Five Below and Build A go up and down completely randomly.
Pair Corralation between Five Below and Build A
Given the investment horizon of 90 days Five Below is expected to generate 7.23 times less return on investment than Build A. But when comparing it to its historical volatility, Five Below is 1.21 times less risky than Build A. It trades about 0.01 of its potential returns per unit of risk. Build A Bear Workshop is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,806 in Build A Bear Workshop on January 21, 2024 and sell it today you would earn a total of 1,013 from holding Build A Bear Workshop or generate 56.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Five Below vs. Build A Bear Workshop
Performance |
| Timeline |
| Five Below |
| Build A Bear |
Five Below and Build A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Five Below and Build A
The main advantage of trading using opposite Five Below and Build A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Five Below position performs unexpectedly, Build A 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 Build A will offset losses from the drop in Build A's long position.| Five Below vs. OReilly Automotive | Five Below vs. AutoZone | Five Below vs. Genuine Parts Co | Five Below vs. Williams Sonoma |
| Build A vs. OReilly Automotive | Build A vs. AutoZone | Build A vs. Genuine Parts Co | Build A vs. Williams Sonoma |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Stocks Directory Find actively traded stocks across global markets | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |