Correlation Between 111 and Build A

Can any of the company-specific risk be diversified away by investing in both 111 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 111 and Build A into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 111 Inc and Build A Bear Workshop, you can compare the effects of market volatilities on 111 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 111 with a short position of Build A. Check out your portfolio center. Please also check ongoing floating volatility patterns of 111 and Build A.

Diversification Opportunities for 111 and Build A

0.17

Correlation Coefficient

111  Build A

Average diversification

The 3 months correlation between 111 and Build is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding 111 Inc 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 111 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 111 Inc 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 111 i.e., 111 and Build A go up and down completely randomly.

Pair Corralation between 111 and Build A

Allowing for the 90-day total investment horizon 111 Inc is expected to under-perform the Build A. In addition to that, 111 is 1.58 times more volatile than Build A Bear Workshop. It trades about -0.04 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  2,095  in Build A Bear Workshop on September 14, 2024 and sell it today you would earn a total of  2,056  from holding Build A Bear Workshop or generate 98.14% return on investment over 90 days.

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

111 Inc  vs.  Build A Bear Workshop

111 Inc

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in 111 Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak forward indicators, 111 demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Build A Bear

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Build A Bear Workshop are ranked lower than 11 (%) 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 111 and Build A

The main advantage of trading using opposite 111 and Build A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 111 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 111 Inc 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.

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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .