Correlation Between Industrias Penoles and BJs Restaurants
Can any of the company-specific risk be diversified away by investing in both Industrias Penoles and BJs Restaurants 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 Industrias Penoles and BJs Restaurants into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Industrias Penoles Sab and BJs Restaurants, you can compare the effects of market volatilities on Industrias Penoles and BJs Restaurants 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 Industrias Penoles with a short position of BJs Restaurants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrias Penoles and BJs Restaurants.
Diversification Opportunities for Industrias Penoles and BJs Restaurants
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Industrias and BJs is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Industrias Penoles Sab and BJs Restaurants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BJs Restaurants and Industrias Penoles 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 Industrias Penoles Sab are associated (or correlated) with BJs Restaurants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BJs Restaurants has no effect on the direction of Industrias Penoles i.e., Industrias Penoles and BJs Restaurants go up and down completely randomly.
Pair Corralation between Industrias Penoles and BJs Restaurants
Assuming the 90 days horizon Industrias Penoles Sab is expected to under-perform the BJs Restaurants. In addition to that, Industrias Penoles is 1.59 times more volatile than BJs Restaurants. It trades about -0.05 of its total potential returns per unit of risk. BJs Restaurants is currently generating about 0.25 per unit of volatility. If you would invest 3,080 in BJs Restaurants on September 4, 2024 and sell it today you would earn a total of 480.00 from holding BJs Restaurants or generate 15.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Industrias Penoles Sab vs. BJs Restaurants
Performance |
| Timeline |
| Industrias Penoles Sab |
| BJs Restaurants |
Industrias Penoles and BJs Restaurants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrias Penoles and BJs Restaurants
The main advantage of trading using opposite Industrias Penoles and BJs Restaurants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrias Penoles position performs unexpectedly, BJs Restaurants 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 BJs Restaurants will offset losses from the drop in BJs Restaurants' long position.| Industrias Penoles vs. BHP Group Limited | Industrias Penoles vs. Rio Tinto Group | Industrias Penoles vs. Vale SA | Industrias Penoles vs. Glencore plc |
| BJs Restaurants vs. Apple Inc | BJs Restaurants vs. Apple Inc | BJs Restaurants vs. Apple Inc | BJs Restaurants vs. Apple 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 the Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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