Correlation Between BJs Wholesale and TOWNSQUARE MEDIA
Can any of the company-specific risk be diversified away by investing in both BJs Wholesale and TOWNSQUARE MEDIA 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 TOWNSQUARE MEDIA 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 TOWNSQUARE MEDIA INC, you can compare the effects of market volatilities on BJs Wholesale and TOWNSQUARE MEDIA 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 TOWNSQUARE MEDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Wholesale and TOWNSQUARE MEDIA.
Diversification Opportunities for BJs Wholesale and TOWNSQUARE MEDIA
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BJs and TOWNSQUARE is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding BJs Wholesale Club and TOWNSQUARE MEDIA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOWNSQUARE MEDIA INC 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 TOWNSQUARE MEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOWNSQUARE MEDIA INC has no effect on the direction of BJs Wholesale i.e., BJs Wholesale and TOWNSQUARE MEDIA go up and down completely randomly.
Pair Corralation between BJs Wholesale and TOWNSQUARE MEDIA
Assuming the 90 days horizon BJs Wholesale Club is expected to generate 0.75 times more return on investment than TOWNSQUARE MEDIA. However, BJs Wholesale Club is 1.33 times less risky than TOWNSQUARE MEDIA. It trades about 0.11 of its potential returns per unit of risk. TOWNSQUARE MEDIA INC is currently generating about 0.03 per unit of risk. If you would invest 5,800 in BJs Wholesale Club on September 14, 2024 and sell it today you would earn a total of 3,550 from holding BJs Wholesale Club or generate 61.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BJs Wholesale Club vs. TOWNSQUARE MEDIA INC
Performance |
| Timeline |
| BJs Wholesale Club |
| TOWNSQUARE MEDIA INC |
BJs Wholesale and TOWNSQUARE MEDIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Wholesale and TOWNSQUARE MEDIA
The main advantage of trading using opposite BJs Wholesale and TOWNSQUARE MEDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Wholesale position performs unexpectedly, TOWNSQUARE MEDIA 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 TOWNSQUARE MEDIA will offset losses from the drop in TOWNSQUARE MEDIA's long position.| BJs Wholesale vs. PennyMac Mortgage Investment | BJs Wholesale vs. COSTCO WHOLESALE CDR | BJs Wholesale vs. JIAHUA STORES | BJs Wholesale vs. New Residential Investment |
| TOWNSQUARE MEDIA vs. Apple Inc | TOWNSQUARE MEDIA vs. Apple Inc | TOWNSQUARE MEDIA vs. Apple Inc | TOWNSQUARE MEDIA 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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