Correlation Between BJs Wholesale and Ryman Hospitality
Can any of the company-specific risk be diversified away by investing in both BJs Wholesale and Ryman Hospitality 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 Ryman Hospitality 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 Ryman Hospitality Properties, you can compare the effects of market volatilities on BJs Wholesale and Ryman Hospitality 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 Ryman Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Wholesale and Ryman Hospitality.
Diversification Opportunities for BJs Wholesale and Ryman Hospitality
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BJs and Ryman is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding BJs Wholesale Club and Ryman Hospitality Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ryman Hospitality 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 Ryman Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ryman Hospitality has no effect on the direction of BJs Wholesale i.e., BJs Wholesale and Ryman Hospitality go up and down completely randomly.
Pair Corralation between BJs Wholesale and Ryman Hospitality
Assuming the 90 days horizon BJs Wholesale Club is expected to generate 0.97 times more return on investment than Ryman Hospitality. However, BJs Wholesale Club is 1.03 times less risky than Ryman Hospitality. It trades about 0.32 of its potential returns per unit of risk. Ryman Hospitality Properties is currently generating about 0.03 per unit of risk. If you would invest 8,550 in BJs Wholesale Club on November 3, 2024 and sell it today you would earn a total of 1,000.00 from holding BJs Wholesale Club or generate 11.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
BJs Wholesale Club vs. Ryman Hospitality Properties
Performance |
| Timeline |
| BJs Wholesale Club |
| Ryman Hospitality |
BJs Wholesale and Ryman Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Wholesale and Ryman Hospitality
The main advantage of trading using opposite BJs Wholesale and Ryman Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Wholesale position performs unexpectedly, Ryman Hospitality 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 Ryman Hospitality will offset losses from the drop in Ryman Hospitality's long position.| BJs Wholesale vs. Walmart | BJs Wholesale vs. Walmart | BJs Wholesale vs. Costco Wholesale | BJs Wholesale vs. Target |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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