Correlation Between Leslies and Build A

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

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

Diversification Opportunities for Leslies and Build A

-0.02

Correlation Coefficient

Leslies  Build A

Good diversification

The 3 months correlation between Leslies and Build is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Leslies 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 Leslies 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 Leslies 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 Leslies i.e., Leslies and Build A go up and down completely randomly.

Pair Corralation between Leslies and Build A

Given the investment horizon of 90 days Leslies is expected to under-perform the Build A. In addition to that, Leslies is 2.32 times more volatile than Build A Bear Workshop. It trades about -0.03 of its total potential returns per unit of risk. Build A Bear Workshop is currently generating about 0.1 per unit of volatility. If you would invest  3,310  in Build A Bear Workshop on September 1, 2024 and sell it today you would earn a total of  489.00  from holding Build A Bear Workshop or generate 14.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Leslies  vs.  Build A Bear Workshop

Leslies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Leslies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in December 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Build A Bear

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Build A Bear Workshop are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal fundamental drivers, Build A showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Leslies and Build A

The main advantage of trading using opposite Leslies and Build A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leslies 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.

The idea behind Leslies and Build A Bear Workshop 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.