Correlation Between Build-A-Bear Workshop and Envela Corp

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

Diversification Opportunities for Build-A-Bear Workshop and Envela Corp

0.8
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Build-A-Bear and Envela is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Build-A-Bear Workshop and Envela Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Envela Corp and Build-A-Bear Workshop 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 Build-A-Bear Workshop 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 Build-A-Bear Workshop i.e., Build-A-Bear Workshop and Envela Corp go up and down completely randomly.

Pair Corralation between Build-A-Bear Workshop and Envela Corp

Considering the 90-day investment horizon Build-A-Bear Workshop is expected to generate 1.61 times more return on investment than Envela Corp. However, Build-A-Bear Workshop is 1.61 times more volatile than Envela Corp. It trades about 0.08 of its potential returns per unit of risk. Envela Corp is currently generating about 0.02 per unit of risk. If you would invest  283.00  in Build-A-Bear Workshop on July 4, 2022 and sell it today you would earn a total of  1,050  from holding Build-A-Bear Workshop or generate 371.02% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Build-A-Bear Workshop  vs.  Envela Corp

 Performance (%) 
       Timeline  
Build-A-Bear Workshop 
Build-A-Bear Performance
0 of 100
Over the last 90 days Build-A-Bear Workshop 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 stable which may send shares a bit higher in November 2022. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Build-A-Bear Price Channel

Envela Corp 
Envela Performance
0 of 100
Over the last 90 days Envela Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's essential indicators remain somewhat strong which may send shares a bit higher in November 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

Envela Price Channel

Build-A-Bear Workshop and Envela Corp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Build-A-Bear Workshop and Envela Corp

The main advantage of trading using opposite Build-A-Bear Workshop and Envela Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Build-A-Bear Workshop 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.
Build-A-Bear Workshop vs. Best Buy Company
The idea behind Build-A-Bear Workshop 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.
Envela Corp vs. Amazon Inc
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.

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