Correlation Between BJs Wholesale and AMAG Austria
Can any of the company-specific risk be diversified away by investing in both BJs Wholesale and AMAG Austria 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 AMAG Austria 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 AMAG Austria Metall, you can compare the effects of market volatilities on BJs Wholesale and AMAG Austria 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 AMAG Austria. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Wholesale and AMAG Austria.
Diversification Opportunities for BJs Wholesale and AMAG Austria
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between BJs and AMAG is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding BJs Wholesale Club and AMAG Austria Metall in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMAG Austria Metall 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 AMAG Austria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMAG Austria Metall has no effect on the direction of BJs Wholesale i.e., BJs Wholesale and AMAG Austria go up and down completely randomly.
Pair Corralation between BJs Wholesale and AMAG Austria
Assuming the 90 days horizon BJs Wholesale Club is expected to under-perform the AMAG Austria. In addition to that, BJs Wholesale is 1.32 times more volatile than AMAG Austria Metall. It trades about -0.04 of its total potential returns per unit of risk. AMAG Austria Metall is currently generating about 0.03 per unit of volatility. If you would invest 2,400 in AMAG Austria Metall on October 14, 2024 and sell it today you would earn a total of 10.00 from holding AMAG Austria Metall or generate 0.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BJs Wholesale Club vs. AMAG Austria Metall
Performance |
| Timeline |
| BJs Wholesale Club |
| AMAG Austria Metall |
BJs Wholesale and AMAG Austria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Wholesale and AMAG Austria
The main advantage of trading using opposite BJs Wholesale and AMAG Austria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Wholesale position performs unexpectedly, AMAG Austria 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 AMAG Austria will offset losses from the drop in AMAG Austria's long position.| BJs Wholesale vs. HEALTHSTREAM | BJs Wholesale vs. Siemens Healthineers AG | BJs Wholesale vs. Sims Metal Management | BJs Wholesale vs. WESANA HEALTH HOLD |
| AMAG Austria vs. AEON STORES | AMAG Austria vs. CVW CLEANTECH INC | AMAG Austria vs. Clean Energy Fuels | AMAG Austria 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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