Correlation Between Winmark and Original Bark

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

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

Diversification Opportunities for Winmark and Original Bark

0.59

Correlation Coefficient

Winmark  Original Bark

Very weak diversification

The 3 months correlation between Winmark and Original is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Winmark and Original Bark Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Original Bark and Winmark 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 Winmark are associated (or correlated) with Original Bark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Original Bark has no effect on the direction of Winmark i.e., Winmark and Original Bark go up and down completely randomly.

Pair Corralation between Winmark and Original Bark

Given the investment horizon of 90 days Winmark is expected to under-perform the Original Bark. But the stock apears to be less risky and, when comparing its historical volatility, Winmark is 3.74 times less risky than Original Bark. The stock trades about -0.04 of its potential returns per unit of risk. The Original Bark Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  188.00  in Original Bark Co on October 24, 2024 and sell it today you would earn a total of  4.00  from holding Original Bark Co or generate 2.13% return on investment over 90 days.

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

Winmark  vs.  Original Bark Co

Winmark

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Winmark are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Winmark may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Original Bark

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Original Bark Co are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Original Bark disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Winmark and Original Bark

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

The idea behind Winmark and Original Bark Co 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.