Correlation Between Five Below and Upbound
Can any of the company-specific risk be diversified away by investing in both Five Below and Upbound 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 Upbound into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Five Below and Upbound Group, you can compare the effects of market volatilities on Five Below and Upbound 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 Upbound. Check out your portfolio center. Please also check ongoing floating volatility patterns of Five Below and Upbound.
Diversification Opportunities for Five Below and Upbound
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Five and Upbound is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Five Below and Upbound Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Upbound Group 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 Upbound. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Upbound Group has no effect on the direction of Five Below i.e., Five Below and Upbound go up and down completely randomly.
Pair Corralation between Five Below and Upbound
Given the investment horizon of 90 days Five Below is expected to under-perform the Upbound. In addition to that, Five Below is 1.12 times more volatile than Upbound Group. It trades about -0.04 of its total potential returns per unit of risk. Upbound Group is currently generating about 0.05 per unit of volatility. If you would invest 2,153 in Upbound Group on August 30, 2024 and sell it today you would earn a total of 1,292 from holding Upbound Group or generate 60.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Five Below vs. Upbound Group
Performance |
| Timeline |
| Five Below |
| Upbound Group |
Five Below and Upbound Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Five Below and Upbound
The main advantage of trading using opposite Five Below and Upbound positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Five Below position performs unexpectedly, Upbound 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 Upbound will offset losses from the drop in Upbound's long position.| Five Below vs. OReilly Automotive | Five Below vs. AutoZone | Five Below vs. Genuine Parts Co | Five Below vs. Williams Sonoma |
| Upbound vs. 7125 percent Fixed Rate | Upbound vs. MGIC Investment Corp | Upbound vs. Cincinnati Financial | Upbound vs. Plexus Corp |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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