Correlation Between BJs Wholesale and Zoom Video
Can any of the company-specific risk be diversified away by investing in both BJs Wholesale and Zoom Video 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 Zoom Video 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 Zoom Video Communications, you can compare the effects of market volatilities on BJs Wholesale and Zoom Video 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 Zoom Video. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Wholesale and Zoom Video.
Diversification Opportunities for BJs Wholesale and Zoom Video
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BJs and Zoom is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding BJs Wholesale Club and Zoom Video Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoom Video Communications 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 Zoom Video. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoom Video Communications has no effect on the direction of BJs Wholesale i.e., BJs Wholesale and Zoom Video go up and down completely randomly.
Pair Corralation between BJs Wholesale and Zoom Video
Assuming the 90 days horizon BJs Wholesale Club is expected to generate 0.81 times more return on investment than Zoom Video. However, BJs Wholesale Club is 1.24 times less risky than Zoom Video. It trades about 0.35 of its potential returns per unit of risk. Zoom Video Communications is currently generating about 0.22 per unit of risk. If you would invest 7,800 in BJs Wholesale Club on August 26, 2024 and sell it today you would earn a total of 1,500 from holding BJs Wholesale Club or generate 19.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BJs Wholesale Club vs. Zoom Video Communications
Performance |
| Timeline |
| BJs Wholesale Club |
| Zoom Video Communications |
BJs Wholesale and Zoom Video Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Wholesale and Zoom Video
The main advantage of trading using opposite BJs Wholesale and Zoom Video positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Wholesale position performs unexpectedly, Zoom Video 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 Zoom Video will offset losses from the drop in Zoom Video's long position.| BJs Wholesale vs. Superior Plus Corp | BJs Wholesale vs. NMI Holdings | BJs Wholesale vs. Origin Agritech | BJs Wholesale vs. SIVERS SEMICONDUCTORS AB |
| Zoom Video vs. PACIFIC ONLINE | Zoom Video vs. Commonwealth Bank of | Zoom Video vs. SOFTBANK P ADR | Zoom Video vs. QBE Insurance Group |
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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