Correlation Between BJs Wholesale and Regal Hotels
Can any of the company-specific risk be diversified away by investing in both BJs Wholesale and Regal Hotels 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 Regal Hotels 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 Regal Hotels International, you can compare the effects of market volatilities on BJs Wholesale and Regal Hotels 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 Regal Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Wholesale and Regal Hotels.
Diversification Opportunities for BJs Wholesale and Regal Hotels
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BJs and Regal is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding BJs Wholesale Club and Regal Hotels International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regal Hotels Interna 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 Regal Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regal Hotels Interna has no effect on the direction of BJs Wholesale i.e., BJs Wholesale and Regal Hotels go up and down completely randomly.
Pair Corralation between BJs Wholesale and Regal Hotels
Assuming the 90 days horizon BJs Wholesale Club is expected to generate 0.77 times more return on investment than Regal Hotels. However, BJs Wholesale Club is 1.3 times less risky than Regal Hotels. It trades about 0.1 of its potential returns per unit of risk. Regal Hotels International is currently generating about -0.01 per unit of risk. If you would invest 6,100 in BJs Wholesale Club on August 25, 2024 and sell it today you would earn a total of 2,700 from holding BJs Wholesale Club or generate 44.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BJs Wholesale Club vs. Regal Hotels International
Performance |
| Timeline |
| BJs Wholesale Club |
| Regal Hotels Interna |
BJs Wholesale and Regal Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Wholesale and Regal Hotels
The main advantage of trading using opposite BJs Wholesale and Regal Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Wholesale position performs unexpectedly, Regal Hotels 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 Regal Hotels will offset losses from the drop in Regal Hotels' long position.| BJs Wholesale vs. Superior Plus Corp | BJs Wholesale vs. NMI Holdings | BJs Wholesale vs. Origin Agritech | BJs Wholesale vs. SIVERS SEMICONDUCTORS AB |
| Regal Hotels vs. BJs Wholesale Club | Regal Hotels vs. AOI Electronics Co | Regal Hotels vs. Richardson Electronics | Regal Hotels vs. PICKN PAY STORES |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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