Correlation Between BJs Wholesale and Apple
Can any of the company-specific risk be diversified away by investing in both BJs Wholesale and Apple 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 Apple 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 Apple Inc, you can compare the effects of market volatilities on BJs Wholesale and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Wholesale and Apple.
Diversification Opportunities for BJs Wholesale and Apple
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BJs and Apple is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding BJs Wholesale Club and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of BJs Wholesale i.e., BJs Wholesale and Apple go up and down completely randomly.
Pair Corralation between BJs Wholesale and Apple
Assuming the 90 days horizon BJs Wholesale Club is expected to generate 0.85 times more return on investment than Apple. However, BJs Wholesale Club is 1.17 times less risky than Apple. It trades about 0.29 of its potential returns per unit of risk. Apple Inc is currently generating about -0.08 per unit of risk. If you would invest 8,550 in BJs Wholesale Club on November 3, 2024 and sell it today you would earn a total of 900.00 from holding BJs Wholesale Club or generate 10.53% 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. Apple Inc
Performance |
| Timeline |
| BJs Wholesale Club |
| Apple Inc |
BJs Wholesale and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Wholesale and Apple
The main advantage of trading using opposite BJs Wholesale and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Wholesale position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| BJs Wholesale vs. INTERCONT HOTELS | BJs Wholesale vs. Virtus Investment Partners | BJs Wholesale vs. Scottish Mortgage Investment | BJs Wholesale vs. CHRYSALIS INVESTMENTS LTD |
| Apple vs. USWE SPORTS AB | Apple vs. KIMBALL ELECTRONICS | Apple vs. LG Display Co | Apple vs. COLUMBIA SPORTSWEAR |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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