Correlation Between Aarons and Build A
Can any of the company-specific risk be diversified away by investing in both Aarons 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 Aarons and Build A into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Aarons and Build A Bear Workshop, you can compare the effects of market volatilities on Aarons 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 Aarons with a short position of Build A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aarons and Build A.
Diversification Opportunities for Aarons and Build A
Pay attention - limited upside
The 3 months correlation between Aarons and Build is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding The Aarons 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 Aarons 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 The Aarons 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 Aarons i.e., Aarons and Build A go up and down completely randomly.
Pair Corralation between Aarons and Build A
Considering the 90-day investment horizon The Aarons is expected to under-perform the Build A. In addition to that, Aarons is 1.55 times more volatile than Build A Bear Workshop. It trades about -0.09 of its total potential returns per unit of risk. Build A Bear Workshop is currently generating about 0.06 per unit of volatility. If you would invest 2,964 in Build A Bear Workshop on January 31, 2024 and sell it today you would earn a total of 52.00 from holding Build A Bear Workshop or generate 1.75% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 95.45% |
Values | Daily Returns |
The Aarons vs. Build A Bear Workshop
Performance |
Timeline |
Aarons |
Build A Bear |
Aarons and Build A Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aarons and Build A
The main advantage of trading using opposite Aarons and Build A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aarons 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.Aarons vs. Custom Truck One | Aarons vs. PROG Holdings | Aarons vs. McGrath RentCorp | Aarons vs. HE Equipment Services |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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