Correlation Between Five Below and GOME Retail
Can any of the company-specific risk be diversified away by investing in both Five Below and GOME Retail 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 GOME Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Five Below and GOME Retail Holdings, you can compare the effects of market volatilities on Five Below and GOME Retail 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 GOME Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Five Below and GOME Retail.
Diversification Opportunities for Five Below and GOME Retail
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Five and GOME is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Five Below and GOME Retail Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOME Retail Holdings 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 GOME Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GOME Retail Holdings has no effect on the direction of Five Below i.e., Five Below and GOME Retail go up and down completely randomly.
Pair Corralation between Five Below and GOME Retail
If you would invest 9,988 in Five Below on October 15, 2024 and sell it today you would lose (28.00) from holding Five Below or give up 0.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Five Below vs. GOME Retail Holdings
Performance |
| Timeline |
| Five Below |
| GOME Retail Holdings |
Five Below and GOME Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Five Below and GOME Retail
The main advantage of trading using opposite Five Below and GOME Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Five Below position performs unexpectedly, GOME Retail 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 GOME Retail will offset losses from the drop in GOME Retail's long position.| Five Below vs. Digilife Technologies Limited | Five Below vs. Bio Techne Corp | Five Below vs. PKSHA TECHNOLOGY INC | Five Below vs. Kingdee International Software |
| GOME Retail vs. BE Semiconductor Industries | GOME Retail vs. Jacquet Metal Service | GOME Retail vs. ADRIATIC METALS LS 013355 | GOME Retail vs. Air Transport Services |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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