Correlation Between Original Bark and Build A
Can any of the company-specific risk be diversified away by investing in both Original Bark 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 Original Bark and Build A into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Original Bark Co and Build A Bear Workshop, you can compare the effects of market volatilities on Original Bark 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 Original Bark with a short position of Build A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Original Bark and Build A.
Diversification Opportunities for Original Bark and Build A
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Original and Build is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Original Bark Co 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 Original Bark 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 Original Bark Co 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 Original Bark i.e., Original Bark and Build A go up and down completely randomly.
Pair Corralation between Original Bark and Build A
Given the investment horizon of 90 days Original Bark Co is expected to under-perform the Build A. In addition to that, Original Bark is 1.17 times more volatile than Build A Bear Workshop. It trades about -0.3 of its total potential returns per unit of risk. Build A Bear Workshop is currently generating about -0.13 per unit of volatility. If you would invest 4,250 in Build A Bear Workshop on November 9, 2024 and sell it today you would lose (333.00) from holding Build A Bear Workshop or give up 7.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Original Bark Co vs. Build A Bear Workshop
Performance |
| Timeline |
| Original Bark |
| Build A Bear |
Original Bark and Build A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Original Bark and Build A
The main advantage of trading using opposite Original Bark and Build A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Original Bark 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.| Original Bark vs. Ulta Beauty | Original Bark vs. RH | Original Bark vs. Dicks Sporting Goods | Original Bark vs. AutoZone |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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