Correlation Between BJs Wholesale and KINGBOARD CHEMICAL
Can any of the company-specific risk be diversified away by investing in both BJs Wholesale and KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL, you can compare the effects of market volatilities on BJs Wholesale and KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Wholesale and KINGBOARD CHEMICAL.
Diversification Opportunities for BJs Wholesale and KINGBOARD CHEMICAL
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BJs and KINGBOARD is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding BJs Wholesale Club and KINGBOARD CHEMICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KINGBOARD CHEMICAL has no effect on the direction of BJs Wholesale i.e., BJs Wholesale and KINGBOARD CHEMICAL go up and down completely randomly.
Pair Corralation between BJs Wholesale and KINGBOARD CHEMICAL
Assuming the 90 days horizon BJs Wholesale Club is expected to generate 1.16 times more return on investment than KINGBOARD CHEMICAL. However, BJs Wholesale is 1.16 times more volatile than KINGBOARD CHEMICAL. It trades about 0.31 of its potential returns per unit of risk. KINGBOARD CHEMICAL is currently generating about -0.01 per unit of risk. If you would invest 7,800 in BJs Wholesale Club on August 29, 2024 and sell it today you would earn a total of 1,350 from holding BJs Wholesale Club or generate 17.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BJs Wholesale Club vs. KINGBOARD CHEMICAL
Performance |
| Timeline |
| BJs Wholesale Club |
| KINGBOARD CHEMICAL |
BJs Wholesale and KINGBOARD CHEMICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Wholesale and KINGBOARD CHEMICAL
The main advantage of trading using opposite BJs Wholesale and KINGBOARD CHEMICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Wholesale position performs unexpectedly, KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL will offset losses from the drop in KINGBOARD CHEMICAL's long position.| BJs Wholesale vs. Superior Plus Corp | BJs Wholesale vs. NMI Holdings | BJs Wholesale vs. Origin Agritech | BJs Wholesale vs. SIVERS SEMICONDUCTORS AB |
| KINGBOARD CHEMICAL vs. Apple Inc | KINGBOARD CHEMICAL vs. Apple Inc | KINGBOARD CHEMICAL vs. Microsoft | KINGBOARD CHEMICAL vs. Microsoft |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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