Correlation Between Bed Bath and Envela Corp

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Can any of the company-specific risk be diversified away by investing in both Bed Bath and Envela Corp 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 Bed Bath and Envela Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bed Bath Beyond and Envela Corp, you can compare the effects of market volatilities on Bed Bath and Envela Corp 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 Bed Bath with a short position of Envela Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bed Bath and Envela Corp.

Diversification Opportunities for Bed Bath and Envela Corp

-0.65
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Bed Bath and Envela is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Bed Bath Beyond and Envela Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Envela Corp and Bed Bath 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 Bed Bath Beyond are associated (or correlated) with Envela Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Envela Corp has no effect on the direction of Bed Bath i.e., Bed Bath and Envela Corp go up and down completely randomly.

Pair Corralation between Bed Bath and Envela Corp

Given the investment horizon of 90 days Bed Bath Beyond is expected to under-perform the Envela Corp. In addition to that, Bed Bath is 1.35 times more volatile than Envela Corp. It trades about -0.33 of its total potential returns per unit of risk. Envela Corp is currently generating about 0.25 per unit of volatility. If you would invest  530.00  in Envela Corp on April 1, 2022 and sell it today you would earn a total of  151.00  from holding Envela Corp or generate 28.49% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Bed Bath Beyond  vs.  Envela Corp

 Performance (%) 
      Timeline 
Bed Bath Beyond 
Bed Bath Performance
0 of 100
Over the last 90 days Bed Bath Beyond has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental drivers remain fairly strong which may send shares a bit higher in July 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

Structure and Payout Changes

Last Split Factor
2:1
Dividend Date
2020-04-14
Ex Dividend Date
2020-03-12
Last Split Date
2000-08-14

Bed Bath Price Channel

Envela Corp 
Envela Performance
13 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Envela Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating essential indicators, Envela Corp sustained solid returns over the last few months and may actually be approaching a breakup point.

Envela Price Channel

Bed Bath and Envela Corp Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Bed Bath and Envela Corp

The main advantage of trading using opposite Bed Bath and Envela Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bed Bath position performs unexpectedly, Envela Corp 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 Envela Corp will offset losses from the drop in Envela Corp's long position.
The idea behind Bed Bath Beyond and Envela Corp 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.

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