Correlation Between BJs Wholesale and Safety Insurance
Can any of the company-specific risk be diversified away by investing in both BJs Wholesale and Safety Insurance 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 Safety Insurance 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 Safety Insurance Group, you can compare the effects of market volatilities on BJs Wholesale and Safety Insurance 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 Safety Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Wholesale and Safety Insurance.
Diversification Opportunities for BJs Wholesale and Safety Insurance
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BJs and Safety is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding BJs Wholesale Club and Safety Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safety Insurance 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 Safety Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safety Insurance has no effect on the direction of BJs Wholesale i.e., BJs Wholesale and Safety Insurance go up and down completely randomly.
Pair Corralation between BJs Wholesale and Safety Insurance
Assuming the 90 days horizon BJs Wholesale Club is expected to generate 0.93 times more return on investment than Safety Insurance. However, BJs Wholesale Club is 1.07 times less risky than Safety Insurance. It trades about 0.07 of its potential returns per unit of risk. Safety Insurance Group is currently generating about -0.09 per unit of risk. If you would invest 9,100 in BJs Wholesale Club on December 4, 2024 and sell it today you would earn a total of 550.00 from holding BJs Wholesale Club or generate 6.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BJs Wholesale Club vs. Safety Insurance Group
Performance |
| Timeline |
| BJs Wholesale Club |
| Safety Insurance |
BJs Wholesale and Safety Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Wholesale and Safety Insurance
The main advantage of trading using opposite BJs Wholesale and Safety Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Wholesale position performs unexpectedly, Safety Insurance 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 Safety Insurance will offset losses from the drop in Safety Insurance's long position.| BJs Wholesale vs. Zijin Mining Group | BJs Wholesale vs. Harmony Gold Mining | BJs Wholesale vs. Calibre Mining Corp | BJs Wholesale vs. Coeur Mining |
| Safety Insurance vs. Coor Service Management | Safety Insurance vs. REGAL ASIAN INVESTMENTS | Safety Insurance vs. MTI INVESTMENT SE | Safety Insurance vs. Ares Management Corp |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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