Correlation Between Build A and Atlanta Braves

Can any of the company-specific risk be diversified away by investing in both Build A and Atlanta Braves 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 Build A and Atlanta Braves into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Build A Bear Workshop and Atlanta Braves Holdings, you can compare the effects of market volatilities on Build A and Atlanta Braves 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 Build A with a short position of Atlanta Braves. Check out your portfolio center. Please also check ongoing floating volatility patterns of Build A and Atlanta Braves.

Diversification Opportunities for Build A and Atlanta Braves

-0.68

Correlation Coefficient

Build A  Atlanta Braves

Excellent diversification

The 3 months correlation between Build and Atlanta is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Build A Bear Workshop and Atlanta Braves Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlanta Braves Holdings and Build A 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 Build A Bear Workshop are associated (or correlated) with Atlanta Braves. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlanta Braves Holdings has no effect on the direction of Build A i.e., Build A and Atlanta Braves go up and down completely randomly.

Pair Corralation between Build A and Atlanta Braves

Considering the 90-day investment horizon Build A Bear Workshop is expected to under-perform the Atlanta Braves. In addition to that, Build A is 1.04 times more volatile than Atlanta Braves Holdings. It trades about -0.18 of its total potential returns per unit of risk. Atlanta Braves Holdings is currently generating about -0.06 per unit of volatility. If you would invest  4,078  in Atlanta Braves Holdings on January 20, 2024 and sell it today you would lose (65.00) from holding Atlanta Braves Holdings or give up 1.59% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.65%
Values	Daily Returns

Build A Bear Workshop  vs.  Atlanta Braves Holdings

Build A Bear

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Build A Bear Workshop are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental drivers, Build A showed solid returns over the last few months and may actually be approaching a breakup point.

Atlanta Braves Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atlanta Braves Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Build A and Atlanta Braves

The main advantage of trading using opposite Build A and Atlanta Braves positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Build A position performs unexpectedly, Atlanta Braves 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 Atlanta Braves will offset losses from the drop in Atlanta Braves' long position.

The idea behind Build A Bear Workshop and Atlanta Braves Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Global Correlations module to find global opportunities by holding instruments from different markets.