Correlation Between Bath Body and 1 800
Can any of the company-specific risk be diversified away by investing in both Bath Body and 1 800 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 Bath Body and 1 800 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bath Body Works and 1 800 FLOWERSCOM, you can compare the effects of market volatilities on Bath Body and 1 800 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 Bath Body with a short position of 1 800. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bath Body and 1 800.
Diversification Opportunities for Bath Body and 1 800
Very good diversification
The 3 months correlation between Bath and FLWS is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Bath Body Works and 1 800 FLOWERSCOM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1 800 FLOWERSCOM and Bath Body 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 Bath Body Works are associated (or correlated) with 1 800. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1 800 FLOWERSCOM has no effect on the direction of Bath Body i.e., Bath Body and 1 800 go up and down completely randomly.
Pair Corralation between Bath Body and 1 800
Given the investment horizon of 90 days Bath Body Works is expected to under-perform the 1 800. But the stock apears to be less risky and, when comparing its historical volatility, Bath Body Works is 2.76 times less risky than 1 800. The stock trades about -0.19 of its potential returns per unit of risk. The 1 800 FLOWERSCOM is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 717.00 in 1 800 FLOWERSCOM on October 20, 2024 and sell it today you would earn a total of 97.00 from holding 1 800 FLOWERSCOM or generate 13.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bath Body Works vs. 1 800 FLOWERSCOM
Performance |
| Timeline |
| Bath Body Works |
| 1 800 FLOWERSCOM |
Bath Body and 1 800 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bath Body and 1 800
The main advantage of trading using opposite Bath Body and 1 800 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bath Body position performs unexpectedly, 1 800 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 1 800 will offset losses from the drop in 1 800's long position.| Bath Body vs. Sportsmans | Bath Body vs. Big 5 Sporting | Bath Body vs. Williams Sonoma | Bath Body vs. Dicks Sporting Goods |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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