Correlation Between BJs Wholesale and Strategic Investments
Can any of the company-specific risk be diversified away by investing in both BJs Wholesale and Strategic Investments 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 Strategic Investments 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 Strategic Investments AS, you can compare the effects of market volatilities on BJs Wholesale and Strategic Investments 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 Strategic Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Wholesale and Strategic Investments.
Diversification Opportunities for BJs Wholesale and Strategic Investments
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BJs and Strategic is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding BJs Wholesale Club and Strategic Investments AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Investments 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 Strategic Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Investments has no effect on the direction of BJs Wholesale i.e., BJs Wholesale and Strategic Investments go up and down completely randomly.
Pair Corralation between BJs Wholesale and Strategic Investments
Assuming the 90 days horizon BJs Wholesale is expected to generate 2.15 times less return on investment than Strategic Investments. But when comparing it to its historical volatility, BJs Wholesale Club is 2.39 times less risky than Strategic Investments. It trades about 0.04 of its potential returns per unit of risk. Strategic Investments AS is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 11.00 in Strategic Investments AS on August 25, 2024 and sell it today you would earn a total of 3.00 from holding Strategic Investments AS or generate 27.27% 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. Strategic Investments AS
Performance |
| Timeline |
| BJs Wholesale Club |
| Strategic Investments |
BJs Wholesale and Strategic Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Wholesale and Strategic Investments
The main advantage of trading using opposite BJs Wholesale and Strategic Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Wholesale position performs unexpectedly, Strategic Investments 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 Strategic Investments will offset losses from the drop in Strategic Investments' long position.| BJs Wholesale vs. Walmart | BJs Wholesale vs. Superior Plus Corp | BJs Wholesale vs. NMI Holdings | BJs Wholesale vs. Origin Agritech |
| Strategic Investments vs. The Bank of | Strategic Investments vs. Ares Management Corp | Strategic Investments vs. Superior Plus Corp | Strategic Investments vs. NMI Holdings |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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