Correlation Between BJs Wholesale and FLOW TRADERS
Can any of the company-specific risk be diversified away by investing in both BJs Wholesale and FLOW TRADERS 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 FLOW TRADERS 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 FLOW TRADERS LTD, you can compare the effects of market volatilities on BJs Wholesale and FLOW TRADERS 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 FLOW TRADERS. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Wholesale and FLOW TRADERS.
Diversification Opportunities for BJs Wholesale and FLOW TRADERS
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BJs and FLOW is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding BJs Wholesale Club and FLOW TRADERS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FLOW TRADERS LTD 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 FLOW TRADERS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FLOW TRADERS LTD has no effect on the direction of BJs Wholesale i.e., BJs Wholesale and FLOW TRADERS go up and down completely randomly.
Pair Corralation between BJs Wholesale and FLOW TRADERS
Assuming the 90 days horizon BJs Wholesale Club is expected to generate 0.9 times more return on investment than FLOW TRADERS. However, BJs Wholesale Club is 1.11 times less risky than FLOW TRADERS. It trades about 0.07 of its potential returns per unit of risk. FLOW TRADERS LTD is currently generating about 0.02 per unit of risk. If you would invest 6,400 in BJs Wholesale Club on September 12, 2024 and sell it today you would earn a total of 2,600 from holding BJs Wholesale Club or generate 40.63% 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. FLOW TRADERS LTD
Performance |
| Timeline |
| BJs Wholesale Club |
| FLOW TRADERS LTD |
BJs Wholesale and FLOW TRADERS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Wholesale and FLOW TRADERS
The main advantage of trading using opposite BJs Wholesale and FLOW TRADERS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Wholesale position performs unexpectedly, FLOW TRADERS 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 FLOW TRADERS will offset losses from the drop in FLOW TRADERS's long position.| BJs Wholesale vs. Walmart | BJs Wholesale vs. Costco Wholesale | BJs Wholesale vs. Dollarama | BJs Wholesale vs. Superior Plus Corp |
| FLOW TRADERS vs. RETAIL FOOD GROUP | FLOW TRADERS vs. BJs Wholesale Club | FLOW TRADERS vs. Tradeweb Markets | FLOW TRADERS vs. AUTO TRADER ADR |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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