Correlation Between BJs Wholesale and DATANG INTL
Can any of the company-specific risk be diversified away by investing in both BJs Wholesale and DATANG INTL 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 DATANG INTL 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 DATANG INTL POW, you can compare the effects of market volatilities on BJs Wholesale and DATANG INTL 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 DATANG INTL. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Wholesale and DATANG INTL.
Diversification Opportunities for BJs Wholesale and DATANG INTL
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BJs and DATANG is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding BJs Wholesale Club and DATANG INTL POW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DATANG INTL POW 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 DATANG INTL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DATANG INTL POW has no effect on the direction of BJs Wholesale i.e., BJs Wholesale and DATANG INTL go up and down completely randomly.
Pair Corralation between BJs Wholesale and DATANG INTL
Assuming the 90 days horizon BJs Wholesale Club is expected to generate 0.42 times more return on investment than DATANG INTL. However, BJs Wholesale Club is 2.38 times less risky than DATANG INTL. It trades about 0.22 of its potential returns per unit of risk. DATANG INTL POW is currently generating about 0.02 per unit of risk. If you would invest 8,750 in BJs Wholesale Club on November 8, 2024 and sell it today you would earn a total of 750.00 from holding BJs Wholesale Club or generate 8.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BJs Wholesale Club vs. DATANG INTL POW
Performance |
| Timeline |
| BJs Wholesale Club |
| DATANG INTL POW |
BJs Wholesale and DATANG INTL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Wholesale and DATANG INTL
The main advantage of trading using opposite BJs Wholesale and DATANG INTL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Wholesale position performs unexpectedly, DATANG INTL 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 DATANG INTL will offset losses from the drop in DATANG INTL's long position.| BJs Wholesale vs. ALERION CLEANPOWER | BJs Wholesale vs. FIRST SHIP LEASE | BJs Wholesale vs. SIEM OFFSHORE NEW | BJs Wholesale vs. Semiconductor Manufacturing International |
| DATANG INTL vs. Apple Inc | DATANG INTL vs. Apple Inc | DATANG INTL vs. Apple Inc | DATANG INTL vs. Apple Inc |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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