Correlation Between Envela Corp and Five Below
Can any of the company-specific risk be diversified away by investing in both Envela Corp and Five Below 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 Envela Corp and Five Below into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Envela Corp and Five Below, you can compare the effects of market volatilities on Envela Corp and Five Below 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 Envela Corp with a short position of Five Below. Check out your portfolio center. Please also check ongoing floating volatility patterns of Envela Corp and Five Below.
Diversification Opportunities for Envela Corp and Five Below
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Envela and Five is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Envela Corp and Five Below in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Five Below and Envela Corp 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 Envela Corp are associated (or correlated) with Five Below. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Five Below has no effect on the direction of Envela Corp i.e., Envela Corp and Five Below go up and down completely randomly.
Pair Corralation between Envela Corp and Five Below
Considering the 90-day investment horizon Envela Corp is expected to generate 0.64 times more return on investment than Five Below. However, Envela Corp is 1.55 times less risky than Five Below. It trades about 0.04 of its potential returns per unit of risk. Five Below is currently generating about -0.09 per unit of risk. If you would invest 448.00 in Envela Corp on December 29, 2023 and sell it today you would earn a total of 7.00 from holding Envela Corp or generate 1.56% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Envela Corp vs. Five Below
Performance |
Timeline |
Envela Corp |
Five Below |
Envela Corp and Five Below Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Envela Corp and Five Below
The main advantage of trading using opposite Envela Corp and Five Below positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Envela Corp position performs unexpectedly, Five Below 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 Five Below will offset losses from the drop in Five Below's long position.Envela Corp vs. Macys Inc | Envela Corp vs. Wayfair | Envela Corp vs. 1StdibsCom | Envela Corp vs. AutoNation |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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