Correlation Between BJs Wholesale and Kering SA
Can any of the company-specific risk be diversified away by investing in both BJs Wholesale and Kering SA 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 Kering SA 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 Kering SA, you can compare the effects of market volatilities on BJs Wholesale and Kering SA 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 Kering SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Wholesale and Kering SA.
Diversification Opportunities for BJs Wholesale and Kering SA
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BJs and Kering is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding BJs Wholesale Club and Kering SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kering SA 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 Kering SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kering SA has no effect on the direction of BJs Wholesale i.e., BJs Wholesale and Kering SA go up and down completely randomly.
Pair Corralation between BJs Wholesale and Kering SA
Assuming the 90 days horizon BJs Wholesale Club is expected to generate 0.89 times more return on investment than Kering SA. However, BJs Wholesale Club is 1.12 times less risky than Kering SA. It trades about 0.23 of its potential returns per unit of risk. Kering SA is currently generating about 0.13 per unit of risk. If you would invest 8,350 in BJs Wholesale Club on September 13, 2024 and sell it today you would earn a total of 1,050 from holding BJs Wholesale Club or generate 12.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
BJs Wholesale Club vs. Kering SA
Performance |
| Timeline |
| BJs Wholesale Club |
| Kering SA |
BJs Wholesale and Kering SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Wholesale and Kering SA
The main advantage of trading using opposite BJs Wholesale and Kering SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Wholesale position performs unexpectedly, Kering SA 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 Kering SA will offset losses from the drop in Kering SA's long position.| BJs Wholesale vs. PennyMac Mortgage Investment | BJs Wholesale vs. COSTCO WHOLESALE CDR | BJs Wholesale vs. JIAHUA STORES | BJs Wholesale vs. New Residential Investment |
| Kering SA vs. BOSTON BEER A | Kering SA vs. Fevertree Drinks PLC | Kering SA vs. QBE Insurance Group | Kering SA vs. JSC Halyk bank |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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