Correlation Between BJs Wholesale and EMBARK EDUCATION
Can any of the company-specific risk be diversified away by investing in both BJs Wholesale and EMBARK EDUCATION 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 EMBARK EDUCATION 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 EMBARK EDUCATION LTD, you can compare the effects of market volatilities on BJs Wholesale and EMBARK EDUCATION 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 EMBARK EDUCATION. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Wholesale and EMBARK EDUCATION.
Diversification Opportunities for BJs Wholesale and EMBARK EDUCATION
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between BJs and EMBARK is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding BJs Wholesale Club and EMBARK EDUCATION LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMBARK EDUCATION LTD 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 EMBARK EDUCATION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMBARK EDUCATION LTD has no effect on the direction of BJs Wholesale i.e., BJs Wholesale and EMBARK EDUCATION go up and down completely randomly.
Pair Corralation between BJs Wholesale and EMBARK EDUCATION
Assuming the 90 days horizon BJs Wholesale Club is expected to generate 2.55 times more return on investment than EMBARK EDUCATION. However, BJs Wholesale is 2.55 times more volatile than EMBARK EDUCATION LTD. It trades about 0.07 of its potential returns per unit of risk. EMBARK EDUCATION LTD is currently generating about 0.12 per unit of risk. If you would invest 8,100 in BJs Wholesale Club on October 26, 2024 and sell it today you would earn a total of 1,100 from holding BJs Wholesale Club or generate 13.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BJs Wholesale Club vs. EMBARK EDUCATION LTD
Performance |
| Timeline |
| BJs Wholesale Club |
| EMBARK EDUCATION LTD |
BJs Wholesale and EMBARK EDUCATION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Wholesale and EMBARK EDUCATION
The main advantage of trading using opposite BJs Wholesale and EMBARK EDUCATION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Wholesale position performs unexpectedly, EMBARK EDUCATION 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 EMBARK EDUCATION will offset losses from the drop in EMBARK EDUCATION's long position.| BJs Wholesale vs. Walmart | BJs Wholesale vs. Walmart | BJs Wholesale vs. Costco Wholesale | BJs Wholesale vs. Target |
| EMBARK EDUCATION vs. Caseys General Stores | EMBARK EDUCATION vs. G III Apparel Group | EMBARK EDUCATION vs. ADRIATIC METALS LS 013355 | EMBARK EDUCATION vs. BJs Wholesale Club |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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