Correlation Between BJs Wholesale and NTG Nordic
Can any of the company-specific risk be diversified away by investing in both BJs Wholesale and NTG Nordic 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 NTG Nordic 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 NTG Nordic Transport, you can compare the effects of market volatilities on BJs Wholesale and NTG Nordic 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 NTG Nordic. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Wholesale and NTG Nordic.
Diversification Opportunities for BJs Wholesale and NTG Nordic
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BJs and NTG is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding BJs Wholesale Club and NTG Nordic Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NTG Nordic Transport 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 NTG Nordic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NTG Nordic Transport has no effect on the direction of BJs Wholesale i.e., BJs Wholesale and NTG Nordic go up and down completely randomly.
Pair Corralation between BJs Wholesale and NTG Nordic
Assuming the 90 days horizon BJs Wholesale Club is expected to generate 0.78 times more return on investment than NTG Nordic. However, BJs Wholesale Club is 1.28 times less risky than NTG Nordic. It trades about 0.07 of its potential returns per unit of risk. NTG Nordic Transport is currently generating about 0.0 per unit of risk. If you would invest 7,950 in BJs Wholesale Club on September 2, 2024 and sell it today you would earn a total of 1,100 from holding BJs Wholesale Club or generate 13.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BJs Wholesale Club vs. NTG Nordic Transport
Performance |
| Timeline |
| BJs Wholesale Club |
| NTG Nordic Transport |
BJs Wholesale and NTG Nordic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Wholesale and NTG Nordic
The main advantage of trading using opposite BJs Wholesale and NTG Nordic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Wholesale position performs unexpectedly, NTG Nordic 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 NTG Nordic will offset losses from the drop in NTG Nordic'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 |
| NTG Nordic vs. Superior Plus Corp | NTG Nordic vs. NMI Holdings | NTG Nordic vs. Origin Agritech | NTG Nordic vs. SIVERS SEMICONDUCTORS AB |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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