Correlation Between Five Below and Stellantis
Can any of the company-specific risk be diversified away by investing in both Five Below and Stellantis 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 Stellantis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Five Below and Stellantis NV, you can compare the effects of market volatilities on Five Below and Stellantis 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 Stellantis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Five Below and Stellantis.
Diversification Opportunities for Five Below and Stellantis
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Five and Stellantis is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Five Below and Stellantis NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stellantis NV 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 Stellantis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stellantis NV has no effect on the direction of Five Below i.e., Five Below and Stellantis go up and down completely randomly.
Pair Corralation between Five Below and Stellantis
Given the investment horizon of 90 days Five Below is expected to generate 1.72 times more return on investment than Stellantis. However, Five Below is 1.72 times more volatile than Stellantis NV. It trades about -0.08 of its potential returns per unit of risk. Stellantis NV is currently generating about -0.19 per unit of risk. If you would invest 13,274 in Five Below on August 24, 2024 and sell it today you would lose (4,925) from holding Five Below or give up 37.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Five Below vs. Stellantis NV
Performance |
| Timeline |
| Five Below |
| Stellantis NV |
Five Below and Stellantis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Five Below and Stellantis
The main advantage of trading using opposite Five Below and Stellantis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Five Below position performs unexpectedly, Stellantis 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 Stellantis will offset losses from the drop in Stellantis' long position.| Five Below vs. Winmark | Five Below vs. Arko Corp | Five Below vs. ABIVAX Socit Anonyme | Five Below vs. SCOR PK |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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