Correlation Between BJs Wholesale and VIVA WINE
Can any of the company-specific risk be diversified away by investing in both BJs Wholesale and VIVA WINE 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 VIVA WINE 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 VIVA WINE GROUP, you can compare the effects of market volatilities on BJs Wholesale and VIVA WINE 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 VIVA WINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Wholesale and VIVA WINE.
Diversification Opportunities for BJs Wholesale and VIVA WINE
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BJs and VIVA is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding BJs Wholesale Club and VIVA WINE GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIVA WINE GROUP 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 VIVA WINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VIVA WINE GROUP has no effect on the direction of BJs Wholesale i.e., BJs Wholesale and VIVA WINE go up and down completely randomly.
Pair Corralation between BJs Wholesale and VIVA WINE
Assuming the 90 days horizon BJs Wholesale Club is expected to generate 1.62 times more return on investment than VIVA WINE. However, BJs Wholesale is 1.62 times more volatile than VIVA WINE GROUP. It trades about 0.31 of its potential returns per unit of risk. VIVA WINE GROUP is currently generating about -0.18 per unit of risk. If you would invest 7,700 in BJs Wholesale Club on August 31, 2024 and sell it today you would earn a total of 1,350 from holding BJs Wholesale Club or generate 17.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BJs Wholesale Club vs. VIVA WINE GROUP
Performance |
| Timeline |
| BJs Wholesale Club |
| VIVA WINE GROUP |
BJs Wholesale and VIVA WINE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Wholesale and VIVA WINE
The main advantage of trading using opposite BJs Wholesale and VIVA WINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Wholesale position performs unexpectedly, VIVA WINE 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 VIVA WINE will offset losses from the drop in VIVA WINE's long position.| BJs Wholesale vs. COPLAND ROAD CAPITAL | BJs Wholesale vs. Natural Health Trends | BJs Wholesale vs. EVS Broadcast Equipment | BJs Wholesale vs. EPSILON HEALTHCARE LTD |
| VIVA WINE vs. Lion Biotechnologies | VIVA WINE vs. QURATE RETAIL INC | VIVA WINE vs. BJs Wholesale Club | VIVA WINE vs. ACCSYS TECHPLC EO |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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