Correlation Between BJs Wholesale and ShotSpotter
Can any of the company-specific risk be diversified away by investing in both BJs Wholesale and ShotSpotter 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 ShotSpotter 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 ShotSpotter, you can compare the effects of market volatilities on BJs Wholesale and ShotSpotter 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 ShotSpotter. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Wholesale and ShotSpotter.
Diversification Opportunities for BJs Wholesale and ShotSpotter
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between BJs and ShotSpotter is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding BJs Wholesale Club and ShotSpotter in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ShotSpotter 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 ShotSpotter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ShotSpotter has no effect on the direction of BJs Wholesale i.e., BJs Wholesale and ShotSpotter go up and down completely randomly.
Pair Corralation between BJs Wholesale and ShotSpotter
Assuming the 90 days horizon BJs Wholesale Club is expected to generate 0.46 times more return on investment than ShotSpotter. However, BJs Wholesale Club is 2.18 times less risky than ShotSpotter. It trades about 0.05 of its potential returns per unit of risk. ShotSpotter is currently generating about -0.03 per unit of risk. If you would invest 6,750 in BJs Wholesale Club on August 31, 2024 and sell it today you would earn a total of 2,300 from holding BJs Wholesale Club or generate 34.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.75% |
| Values | Daily Returns |
BJs Wholesale Club vs. ShotSpotter
Performance |
| Timeline |
| BJs Wholesale Club |
| ShotSpotter |
BJs Wholesale and ShotSpotter Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Wholesale and ShotSpotter
The main advantage of trading using opposite BJs Wholesale and ShotSpotter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Wholesale position performs unexpectedly, ShotSpotter 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 ShotSpotter will offset losses from the drop in ShotSpotter's long position.| BJs Wholesale vs. COPLAND ROAD CAPITAL | BJs Wholesale vs. Natural Health Trends | BJs Wholesale vs. EVS Broadcast Equipment | BJs Wholesale vs. EPSILON HEALTHCARE LTD |
| ShotSpotter vs. BJs Wholesale Club | ShotSpotter vs. PICKN PAY STORES | ShotSpotter vs. National Retail Properties | ShotSpotter vs. JIAHUA STORES |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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