Correlation Between Five Below and 1 800
Can any of the company-specific risk be diversified away by investing in both Five Below 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 Five Below and 1 800 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Five Below and 1 800 FLOWERSCOM, you can compare the effects of market volatilities on Five Below 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 Five Below with a short position of 1 800. Check out your portfolio center. Please also check ongoing floating volatility patterns of Five Below and 1 800.
Diversification Opportunities for Five Below and 1 800
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Five and FLWS is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Five Below 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 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 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 Five Below i.e., Five Below and 1 800 go up and down completely randomly.
Pair Corralation between Five Below and 1 800
Given the investment horizon of 90 days Five Below is expected to generate 2.76 times less return on investment than 1 800. In addition to that, Five Below is 1.32 times more volatile than 1 800 FLOWERSCOM. It trades about 0.02 of its total potential returns per unit of risk. 1 800 FLOWERSCOM is currently generating about 0.07 per unit of volatility. If you would invest 801.00 in 1 800 FLOWERSCOM on August 31, 2024 and sell it today you would earn a total of 28.00 from holding 1 800 FLOWERSCOM or generate 3.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Five Below vs. 1 800 FLOWERSCOM
Performance |
| Timeline |
| Five Below |
| 1 800 FLOWERSCOM |
Five Below and 1 800 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Five Below and 1 800
The main advantage of trading using opposite Five Below and 1 800 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Five Below 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.| 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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