Correlation Between BJs Wholesale and GLOBUS MEDICAL
Can any of the company-specific risk be diversified away by investing in both BJs Wholesale and GLOBUS MEDICAL 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 GLOBUS MEDICAL 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 GLOBUS MEDICAL A, you can compare the effects of market volatilities on BJs Wholesale and GLOBUS MEDICAL 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 GLOBUS MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Wholesale and GLOBUS MEDICAL.
Diversification Opportunities for BJs Wholesale and GLOBUS MEDICAL
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BJs and GLOBUS is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding BJs Wholesale Club and GLOBUS MEDICAL A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GLOBUS MEDICAL A 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 GLOBUS MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GLOBUS MEDICAL A has no effect on the direction of BJs Wholesale i.e., BJs Wholesale and GLOBUS MEDICAL go up and down completely randomly.
Pair Corralation between BJs Wholesale and GLOBUS MEDICAL
Assuming the 90 days horizon BJs Wholesale is expected to generate 1.26 times less return on investment than GLOBUS MEDICAL. But when comparing it to its historical volatility, BJs Wholesale Club is 1.03 times less risky than GLOBUS MEDICAL. It trades about 0.28 of its potential returns per unit of risk. GLOBUS MEDICAL A is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 7,950 in GLOBUS MEDICAL A on November 7, 2024 and sell it today you would earn a total of 1,000.00 from holding GLOBUS MEDICAL A or generate 12.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BJs Wholesale Club vs. GLOBUS MEDICAL A
Performance |
| Timeline |
| BJs Wholesale Club |
| GLOBUS MEDICAL A |
BJs Wholesale and GLOBUS MEDICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Wholesale and GLOBUS MEDICAL
The main advantage of trading using opposite BJs Wholesale and GLOBUS MEDICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Wholesale position performs unexpectedly, GLOBUS MEDICAL 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 GLOBUS MEDICAL will offset losses from the drop in GLOBUS MEDICAL'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 |
| GLOBUS MEDICAL vs. Apple Inc | GLOBUS MEDICAL vs. Apple Inc | GLOBUS MEDICAL vs. Apple Inc | GLOBUS MEDICAL 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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