Correlation Between BJs Wholesale and PICKN PAY
Can any of the company-specific risk be diversified away by investing in both BJs Wholesale and PICKN PAY 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 PICKN PAY 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 PICKN PAY STORES, you can compare the effects of market volatilities on BJs Wholesale and PICKN PAY 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 PICKN PAY. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Wholesale and PICKN PAY.
Diversification Opportunities for BJs Wholesale and PICKN PAY
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BJs and PICKN is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding BJs Wholesale Club and PICKN PAY STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PICKN PAY STORES 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 PICKN PAY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PICKN PAY STORES has no effect on the direction of BJs Wholesale i.e., BJs Wholesale and PICKN PAY go up and down completely randomly.
Pair Corralation between BJs Wholesale and PICKN PAY
Assuming the 90 days horizon BJs Wholesale is expected to generate 1.71 times less return on investment than PICKN PAY. But when comparing it to its historical volatility, BJs Wholesale Club is 2.28 times less risky than PICKN PAY. It trades about 0.08 of its potential returns per unit of risk. PICKN PAY STORES is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 125.00 in PICKN PAY STORES on August 26, 2024 and sell it today you would earn a total of 26.00 from holding PICKN PAY STORES or generate 20.8% 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. PICKN PAY STORES
Performance |
| Timeline |
| BJs Wholesale Club |
| PICKN PAY STORES |
BJs Wholesale and PICKN PAY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Wholesale and PICKN PAY
The main advantage of trading using opposite BJs Wholesale and PICKN PAY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Wholesale position performs unexpectedly, PICKN PAY 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 PICKN PAY will offset losses from the drop in PICKN PAY'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 |
| PICKN PAY vs. GLG LIFE TECH | PICKN PAY vs. Mobilezone Holding AG | PICKN PAY vs. ACCSYS TECHPLC EO | PICKN PAY vs. Chunghwa Telecom Co |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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