Correlation Between Barnes Noble and Original Bark
Can any of the company-specific risk be diversified away by investing in both Barnes Noble and Original Bark 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 Barnes Noble and Original Bark into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barnes Noble Education and Original Bark Co, you can compare the effects of market volatilities on Barnes Noble and Original Bark 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 Barnes Noble with a short position of Original Bark. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barnes Noble and Original Bark.
Diversification Opportunities for Barnes Noble and Original Bark
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Barnes and Original is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Barnes Noble Education and Original Bark Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Original Bark and Barnes Noble 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 Barnes Noble Education are associated (or correlated) with Original Bark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Original Bark has no effect on the direction of Barnes Noble i.e., Barnes Noble and Original Bark go up and down completely randomly.
Pair Corralation between Barnes Noble and Original Bark
Given the investment horizon of 90 days Barnes Noble is expected to generate 4.96 times less return on investment than Original Bark. In addition to that, Barnes Noble is 1.81 times more volatile than Original Bark Co. It trades about 0.05 of its total potential returns per unit of risk. Original Bark Co is currently generating about 0.41 per unit of volatility. If you would invest 140.00 in Original Bark Co on August 28, 2024 and sell it today you would earn a total of 59.00 from holding Original Bark Co or generate 42.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barnes Noble Education vs. Original Bark Co
Performance |
| Timeline |
| Barnes Noble Education |
| Original Bark |
Barnes Noble and Original Bark Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barnes Noble and Original Bark
The main advantage of trading using opposite Barnes Noble and Original Bark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barnes Noble position performs unexpectedly, Original Bark 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 Original Bark will offset losses from the drop in Original Bark's long position.| Barnes Noble vs. Sportsmans | Barnes Noble vs. MarineMax | Barnes Noble vs. Build A Bear Workshop | Barnes Noble vs. Leslies |
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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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