Correlation Between Barnes Noble and Build A
Can any of the company-specific risk be diversified away by investing in both Barnes Noble and Build A 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 Barnes Noble and Build A into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barnes Noble Education and Build A Bear Workshop, you can compare the effects of market volatilities on Barnes Noble and Build A 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 Barnes Noble with a short position of Build A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barnes Noble and Build A.
Diversification Opportunities for Barnes Noble and Build A
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Barnes and Build is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Barnes Noble Education and Build A Bear Workshop in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Build A Bear and Barnes Noble 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 Barnes Noble Education are associated (or correlated) with Build A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Build A Bear has no effect on the direction of Barnes Noble i.e., Barnes Noble and Build A go up and down completely randomly.
Pair Corralation between Barnes Noble and Build A
Given the investment horizon of 90 days Barnes Noble Education is expected to under-perform the Build A. In addition to that, Barnes Noble is 10.83 times more volatile than Build A Bear Workshop. It trades about -0.22 of its total potential returns per unit of risk. Build A Bear Workshop is currently generating about 0.04 per unit of volatility. If you would invest 2,943 in Build A Bear Workshop on January 26, 2024 and sell it today you would earn a total of 33.00 from holding Build A Bear Workshop or generate 1.12% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 95.45% |
Values | Daily Returns |
Barnes Noble Education vs. Build A Bear Workshop
Performance |
Timeline |
Barnes Noble Education |
Build A Bear |
Barnes Noble and Build A Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Barnes Noble and Build A
The main advantage of trading using opposite Barnes Noble and Build A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barnes Noble position performs unexpectedly, Build A 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 Build A will offset losses from the drop in Build A's long position.Barnes Noble vs. Target | Barnes Noble vs. Lowes Companies | Barnes Noble vs. Kohls Corp | Barnes Noble vs. Gap Inc |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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