Correlation Between BJs Wholesale and AVITA Medical
Can any of the company-specific risk be diversified away by investing in both BJs Wholesale and AVITA Medical 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 AVITA Medical 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 AVITA Medical, you can compare the effects of market volatilities on BJs Wholesale and AVITA Medical 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 AVITA Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Wholesale and AVITA Medical.
Diversification Opportunities for BJs Wholesale and AVITA Medical
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BJs and AVITA is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding BJs Wholesale Club and AVITA Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AVITA Medical 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 AVITA Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AVITA Medical has no effect on the direction of BJs Wholesale i.e., BJs Wholesale and AVITA Medical go up and down completely randomly.
Pair Corralation between BJs Wholesale and AVITA Medical
Assuming the 90 days horizon BJs Wholesale Club is expected to generate 0.18 times more return on investment than AVITA Medical. However, BJs Wholesale Club is 5.69 times less risky than AVITA Medical. It trades about 0.05 of its potential returns per unit of risk. AVITA Medical is currently generating about -0.15 per unit of risk. If you would invest 9,200 in BJs Wholesale Club on October 14, 2024 and sell it today you would earn a total of 100.00 from holding BJs Wholesale Club or generate 1.09% 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. AVITA Medical
Performance |
| Timeline |
| BJs Wholesale Club |
| AVITA Medical |
BJs Wholesale and AVITA Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Wholesale and AVITA Medical
The main advantage of trading using opposite BJs Wholesale and AVITA Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Wholesale position performs unexpectedly, AVITA Medical 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 AVITA Medical will offset losses from the drop in AVITA Medical's long position.| BJs Wholesale vs. HOCHSCHILD MINING | BJs Wholesale vs. InPlay Oil Corp | BJs Wholesale vs. Playtech plc | BJs Wholesale vs. ARISTOCRAT LEISURE |
| AVITA Medical vs. Apple Inc | AVITA Medical vs. Apple Inc | AVITA Medical vs. Apple Inc | AVITA Medical 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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