Correlation Between BJs Wholesale and ANGANG STEEL
Can any of the company-specific risk be diversified away by investing in both BJs Wholesale and ANGANG STEEL 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 ANGANG STEEL 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 ANGANG STEEL H , you can compare the effects of market volatilities on BJs Wholesale and ANGANG STEEL 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 ANGANG STEEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Wholesale and ANGANG STEEL.
Diversification Opportunities for BJs Wholesale and ANGANG STEEL
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between BJs and ANGANG is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding BJs Wholesale Club and ANGANG STEEL H in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANGANG STEEL H 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 ANGANG STEEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANGANG STEEL H has no effect on the direction of BJs Wholesale i.e., BJs Wholesale and ANGANG STEEL go up and down completely randomly.
Pair Corralation between BJs Wholesale and ANGANG STEEL
Assuming the 90 days horizon BJs Wholesale is expected to generate 1.29 times less return on investment than ANGANG STEEL. But when comparing it to its historical volatility, BJs Wholesale Club is 2.21 times less risky than ANGANG STEEL. It trades about 0.28 of its potential returns per unit of risk. ANGANG STEEL H is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 17.00 in ANGANG STEEL H on November 7, 2024 and sell it today you would earn a total of 2.00 from holding ANGANG STEEL H or generate 11.76% 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. ANGANG STEEL H
Performance |
| Timeline |
| BJs Wholesale Club |
| ANGANG STEEL H |
BJs Wholesale and ANGANG STEEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Wholesale and ANGANG STEEL
The main advantage of trading using opposite BJs Wholesale and ANGANG STEEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Wholesale position performs unexpectedly, ANGANG STEEL 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 ANGANG STEEL will offset losses from the drop in ANGANG STEEL'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 |
| ANGANG STEEL vs. Universal Entertainment | ANGANG STEEL vs. Agilent Technologies | ANGANG STEEL vs. Allegheny Technologies Incorporated | ANGANG STEEL vs. PROSIEBENSAT1 MEDIADR4 |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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