Correlation Between Five Below and Tractor Supply
Can any of the company-specific risk be diversified away by investing in both Five Below and Tractor Supply 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 Five Below and Tractor Supply into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Five Below and Tractor Supply, you can compare the effects of market volatilities on Five Below and Tractor Supply 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 Five Below with a short position of Tractor Supply. Check out your portfolio center. Please also check ongoing floating volatility patterns of Five Below and Tractor Supply.
Diversification Opportunities for Five Below and Tractor Supply
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Five and Tractor is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Five Below and Tractor Supply in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tractor Supply and Five Below 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 Five Below are associated (or correlated) with Tractor Supply. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tractor Supply has no effect on the direction of Five Below i.e., Five Below and Tractor Supply go up and down completely randomly.
Pair Corralation between Five Below and Tractor Supply
Given the investment horizon of 90 days Five Below is expected to generate 1.81 times more return on investment than Tractor Supply. However, Five Below is 1.81 times more volatile than Tractor Supply. It trades about 0.15 of its potential returns per unit of risk. Tractor Supply is currently generating about -0.15 per unit of risk. If you would invest 14,696 in Five Below on September 13, 2025 and sell it today you would earn a total of 3,445 from holding Five Below or generate 23.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Five Below vs. Tractor Supply
Performance |
| Timeline |
| Five Below |
| Tractor Supply |
Five Below and Tractor Supply Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Five Below and Tractor Supply
The main advantage of trading using opposite Five Below and Tractor Supply positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Five Below position performs unexpectedly, Tractor Supply 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 Tractor Supply will offset losses from the drop in Tractor Supply's long position.| Five Below vs. Gildan Activewear | Five Below vs. Vipshop Holdings Limited | Five Below vs. Dillards, | Five Below vs. The Gap, |
| Tractor Supply vs. Williams Sonoma | Tractor Supply vs. Ulta Beauty | Tractor Supply vs. Viking Holdings | Tractor Supply vs. Expedia Group |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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