Correlation Between BJs Wholesale and Pick N
Can any of the company-specific risk be diversified away by investing in both BJs Wholesale and Pick N 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 Pick N 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 Pick n Pay, you can compare the effects of market volatilities on BJs Wholesale and Pick N 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 Pick N. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Wholesale and Pick N.
Diversification Opportunities for BJs Wholesale and Pick N
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BJs and Pick is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding BJs Wholesale Club and Pick n Pay in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pick n Pay 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 Pick N. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pick n Pay has no effect on the direction of BJs Wholesale i.e., BJs Wholesale and Pick N go up and down completely randomly.
Pair Corralation between BJs Wholesale and Pick N
Assuming the 90 days horizon BJs Wholesale is expected to generate 15.18 times less return on investment than Pick N. But when comparing it to its historical volatility, BJs Wholesale Club is 18.55 times less risky than Pick N. It trades about 0.04 of its potential returns per unit of risk. Pick n Pay is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 330.00 in Pick n Pay on September 2, 2024 and sell it today you would lose (175.00) from holding Pick n Pay or give up 53.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BJs Wholesale Club vs. Pick n Pay
Performance |
| Timeline |
| BJs Wholesale Club |
| Pick n Pay |
BJs Wholesale and Pick N Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Wholesale and Pick N
The main advantage of trading using opposite BJs Wholesale and Pick N positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Wholesale position performs unexpectedly, Pick N 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 Pick N will offset losses from the drop in Pick N'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 |
| Pick N vs. Taiwan Semiconductor Manufacturing | Pick N vs. AUSTEVOLL SEAFOOD | Pick N vs. Tower Semiconductor | Pick N vs. CN MODERN DAIRY |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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