Correlation Between Five Below and Conns
Can any of the company-specific risk be diversified away by investing in both Five Below and Conns 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 Conns into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Five Below and Conns Inc, you can compare the effects of market volatilities on Five Below and Conns 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 Conns. Check out your portfolio center. Please also check ongoing floating volatility patterns of Five Below and Conns.
Diversification Opportunities for Five Below and Conns
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Five and Conns is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Five Below and Conns Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Conns Inc 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 Conns. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Conns Inc has no effect on the direction of Five Below i.e., Five Below and Conns go up and down completely randomly.
Pair Corralation between Five Below and Conns
Given the investment horizon of 90 days Five Below is expected to generate 0.31 times more return on investment than Conns. However, Five Below is 3.19 times less risky than Conns. It trades about -0.04 of its potential returns per unit of risk. Conns Inc is currently generating about -0.13 per unit of risk. If you would invest 17,676 in Five Below on August 30, 2024 and sell it today you would lose (8,375) from holding Five Below or give up 47.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 84.85% |
| Values | Daily Returns |
Five Below vs. Conns Inc
Performance |
| Timeline |
| Five Below |
| Conns Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Five Below and Conns Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Five Below and Conns
The main advantage of trading using opposite Five Below and Conns positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Five Below position performs unexpectedly, Conns 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 Conns will offset losses from the drop in Conns' long position.| Five Below vs. OReilly Automotive | Five Below vs. AutoZone | Five Below vs. Genuine Parts Co | Five Below 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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