Correlation Between AutoZone, and Bath Body

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

By analyzing existing cross correlation between AutoZone, and Bath Body Works, you can compare the effects of market volatilities on AutoZone, and Bath Body 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 AutoZone, with a short position of Bath Body. Check out your portfolio center. Please also check ongoing floating volatility patterns of AutoZone, and Bath Body.

Diversification Opportunities for AutoZone, and Bath Body

-0.12

Correlation Coefficient

AutoZone,  Bath Body

Good diversification

The 3 months correlation between AutoZone, and Bath is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding AutoZone, and Bath Body Works in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bath Body Works and AutoZone, 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 AutoZone, are associated (or correlated) with Bath Body. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bath Body Works has no effect on the direction of AutoZone, i.e., AutoZone, and Bath Body go up and down completely randomly.

Pair Corralation between AutoZone, and Bath Body

Assuming the 90 days trading horizon AutoZone, is expected to generate 0.31 times more return on investment than Bath Body. However, AutoZone, is 3.22 times less risky than Bath Body. It trades about 0.03 of its potential returns per unit of risk. Bath Body Works is currently generating about -0.14 per unit of risk. If you would invest  9,160  in AutoZone, on December 25, 2024 and sell it today you would earn a total of  137.00  from holding AutoZone, or generate 1.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.31%
Values	Daily Returns

AutoZone,  vs.  Bath Body Works

AutoZone,

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AutoZone, are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, AutoZone, is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Bath Body Works

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bath Body Works has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with AutoZone, and Bath Body

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

The idea behind AutoZone, and Bath Body Works 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 CEOs Directory module to screen CEOs from public companies around the world.