Correlation Between BJs Wholesale and CHINA EDUCATION
Can any of the company-specific risk be diversified away by investing in both BJs Wholesale and CHINA 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 CHINA 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 CHINA EDUCATION GROUP, you can compare the effects of market volatilities on BJs Wholesale and CHINA 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 CHINA EDUCATION. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Wholesale and CHINA EDUCATION.
Diversification Opportunities for BJs Wholesale and CHINA EDUCATION
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BJs and CHINA is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding BJs Wholesale Club and CHINA EDUCATION GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA EDUCATION GROUP 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 CHINA EDUCATION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA EDUCATION GROUP has no effect on the direction of BJs Wholesale i.e., BJs Wholesale and CHINA EDUCATION go up and down completely randomly.
Pair Corralation between BJs Wholesale and CHINA EDUCATION
Assuming the 90 days horizon BJs Wholesale is expected to generate 1.27 times less return on investment than CHINA EDUCATION. But when comparing it to its historical volatility, BJs Wholesale Club is 2.74 times less risky than CHINA EDUCATION. It trades about 0.05 of its potential returns per unit of risk. CHINA EDUCATION GROUP is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 37.00 in CHINA EDUCATION GROUP on October 12, 2024 and sell it today you would earn a total of 2.00 from holding CHINA EDUCATION GROUP or generate 5.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BJs Wholesale Club vs. CHINA EDUCATION GROUP
Performance |
| Timeline |
| BJs Wholesale Club |
| CHINA EDUCATION GROUP |
BJs Wholesale and CHINA EDUCATION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Wholesale and CHINA EDUCATION
The main advantage of trading using opposite BJs Wholesale and CHINA EDUCATION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Wholesale position performs unexpectedly, CHINA 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 CHINA EDUCATION will offset losses from the drop in CHINA EDUCATION's long position.| BJs Wholesale vs. ALGOMA STEEL GROUP | BJs Wholesale vs. Khiron Life Sciences | BJs Wholesale vs. Sch Environnement SA | BJs Wholesale vs. Schnitzer Steel Industries |
| CHINA EDUCATION vs. COSTCO WHOLESALE CDR | CHINA EDUCATION vs. Burlington Stores | CHINA EDUCATION vs. RETAIL FOOD GROUP | CHINA 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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