Correlation Between BJs Wholesale and CHRYSALIS INVESTMENTS
Can any of the company-specific risk be diversified away by investing in both BJs Wholesale and CHRYSALIS INVESTMENTS 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 BJs Wholesale and CHRYSALIS INVESTMENTS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BJs Wholesale Club and CHRYSALIS INVESTMENTS LTD, you can compare the effects of market volatilities on BJs Wholesale and CHRYSALIS INVESTMENTS 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 BJs Wholesale with a short position of CHRYSALIS INVESTMENTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Wholesale and CHRYSALIS INVESTMENTS.
Diversification Opportunities for BJs Wholesale and CHRYSALIS INVESTMENTS
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BJs and CHRYSALIS is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding BJs Wholesale Club and CHRYSALIS INVESTMENTS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHRYSALIS INVESTMENTS LTD and BJs Wholesale 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 BJs Wholesale Club are associated (or correlated) with CHRYSALIS INVESTMENTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHRYSALIS INVESTMENTS LTD has no effect on the direction of BJs Wholesale i.e., BJs Wholesale and CHRYSALIS INVESTMENTS go up and down completely randomly.
Pair Corralation between BJs Wholesale and CHRYSALIS INVESTMENTS
Assuming the 90 days horizon BJs Wholesale Club is expected to under-perform the CHRYSALIS INVESTMENTS. But the stock apears to be less risky and, when comparing its historical volatility, BJs Wholesale Club is 1.58 times less risky than CHRYSALIS INVESTMENTS. The stock trades about -0.23 of its potential returns per unit of risk. The CHRYSALIS INVESTMENTS LTD is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 118.00 in CHRYSALIS INVESTMENTS LTD on October 12, 2024 and sell it today you would earn a total of 7.00 from holding CHRYSALIS INVESTMENTS LTD or generate 5.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BJs Wholesale Club vs. CHRYSALIS INVESTMENTS LTD
Performance |
| Timeline |
| BJs Wholesale Club |
| CHRYSALIS INVESTMENTS LTD |
BJs Wholesale and CHRYSALIS INVESTMENTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Wholesale and CHRYSALIS INVESTMENTS
The main advantage of trading using opposite BJs Wholesale and CHRYSALIS INVESTMENTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Wholesale position performs unexpectedly, CHRYSALIS INVESTMENTS 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 CHRYSALIS INVESTMENTS will offset losses from the drop in CHRYSALIS INVESTMENTS's long position.| BJs Wholesale vs. ALGOMA STEEL GROUP | BJs Wholesale vs. Khiron Life Sciences | BJs Wholesale vs. Sch Environnement SA | BJs Wholesale vs. Schnitzer Steel Industries |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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