Correlation Between BJs Wholesale and General Dynamics
Can any of the company-specific risk be diversified away by investing in both BJs Wholesale and General Dynamics 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 General Dynamics 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 General Dynamics, you can compare the effects of market volatilities on BJs Wholesale and General Dynamics 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 General Dynamics. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Wholesale and General Dynamics.
Diversification Opportunities for BJs Wholesale and General Dynamics
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BJs and General is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding BJs Wholesale Club and General Dynamics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Dynamics 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 General Dynamics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Dynamics has no effect on the direction of BJs Wholesale i.e., BJs Wholesale and General Dynamics go up and down completely randomly.
Pair Corralation between BJs Wholesale and General Dynamics
Assuming the 90 days horizon BJs Wholesale Club is expected to generate 1.28 times more return on investment than General Dynamics. However, BJs Wholesale is 1.28 times more volatile than General Dynamics. It trades about 0.05 of its potential returns per unit of risk. General Dynamics is currently generating about 0.03 per unit of risk. If you would invest 6,550 in BJs Wholesale Club on August 28, 2024 and sell it today you would earn a total of 2,750 from holding BJs Wholesale Club or generate 41.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BJs Wholesale Club vs. General Dynamics
Performance |
| Timeline |
| BJs Wholesale Club |
| General Dynamics |
BJs Wholesale and General Dynamics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Wholesale and General Dynamics
The main advantage of trading using opposite BJs Wholesale and General Dynamics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Wholesale position performs unexpectedly, General Dynamics 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 General Dynamics will offset losses from the drop in General Dynamics' long position.| BJs Wholesale vs. Superior Plus Corp | BJs Wholesale vs. NMI Holdings | BJs Wholesale vs. Origin Agritech | BJs Wholesale vs. SIVERS SEMICONDUCTORS AB |
| General Dynamics vs. AUSTEVOLL SEAFOOD | General Dynamics vs. Beyond Meat | General Dynamics vs. TYSON FOODS A | General Dynamics vs. Austevoll Seafood ASA |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |