Correlation Between Clearwater Paper and Build-A-Bear Workshop

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Clearwater Paper and Build-A-Bear Workshop 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 Clearwater Paper and Build-A-Bear Workshop into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clearwater Paper and Build-A-Bear Workshop, you can compare the effects of market volatilities on Clearwater Paper and Build-A-Bear Workshop 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 Clearwater Paper with a short position of Build-A-Bear Workshop. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearwater Paper and Build-A-Bear Workshop.

Diversification Opportunities for Clearwater Paper and Build-A-Bear Workshop

-0.13
  Correlation Coefficient

Good diversification

The 3 months correlation between Clearwater and Build-A-Bear is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Clearwater Paper 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 Workshop and Clearwater Paper 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 Clearwater Paper are associated (or correlated) with Build-A-Bear Workshop. 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 Workshop has no effect on the direction of Clearwater Paper i.e., Clearwater Paper and Build-A-Bear Workshop go up and down completely randomly.

Pair Corralation between Clearwater Paper and Build-A-Bear Workshop

Considering the 90-day investment horizon Clearwater Paper is expected to generate 15.72 times less return on investment than Build-A-Bear Workshop. But when comparing it to its historical volatility, Clearwater Paper is 1.21 times less risky than Build-A-Bear Workshop. It trades about 0.03 of its potential returns per unit of risk. Build-A-Bear Workshop is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest  1,374  in Build-A-Bear Workshop on September 10, 2022 and sell it today you would earn a total of  1,227  from holding Build-A-Bear Workshop or generate 89.3% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Clearwater Paper  vs.  Build-A-Bear Workshop

 Performance (%) 
       Timeline  
Clearwater Paper 
Clearwater Performance
0 of 100
Over the last 90 days Clearwater Paper has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable essential indicators, Clearwater Paper is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Clearwater Price Channel

Build-A-Bear Workshop 
Build-A-Bear Performance
19 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Build-A-Bear Workshop are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent fundamental drivers, Build-A-Bear Workshop showed solid returns over the last few months and may actually be approaching a breakup point.

Build-A-Bear Price Channel

Clearwater Paper and Build-A-Bear Workshop Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Clearwater Paper and Build-A-Bear Workshop

The main advantage of trading using opposite Clearwater Paper and Build-A-Bear Workshop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearwater Paper position performs unexpectedly, Build-A-Bear Workshop 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-Bear Workshop will offset losses from the drop in Build-A-Bear Workshop's long position.
Clearwater Paper vs. Walmart
Clearwater Paper vs. Chevron Corp
Clearwater Paper vs. Pfizer Inc
Clearwater Paper vs. The Boeing
The idea behind Clearwater Paper 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.
Build-A-Bear Workshop vs. Nokia Corp ADR
Build-A-Bear Workshop vs. ADTRAN Inc
Build-A-Bear Workshop vs. Hewlett Packard Enterprise
Build-A-Bear Workshop vs. Ubiquiti Networks
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.

Other Complementary Tools

Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Go
Price Transformation
Use Price Transformation models to analyze depth of different equity instruments across global markets
Go
Portfolio Optimization
Compute new portfolio that will generate highest expected return given your specified tolerance for risk
Go
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets
Go
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Go