Correlation Between BJs Wholesale and Takara Holdings
Can any of the company-specific risk be diversified away by investing in both BJs Wholesale and Takara Holdings 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 Takara Holdings 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 Takara Holdings, you can compare the effects of market volatilities on BJs Wholesale and Takara Holdings 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 Takara Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Wholesale and Takara Holdings.
Diversification Opportunities for BJs Wholesale and Takara Holdings
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between BJs and Takara is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding BJs Wholesale Club and Takara Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Takara Holdings 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 Takara Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Takara Holdings has no effect on the direction of BJs Wholesale i.e., BJs Wholesale and Takara Holdings go up and down completely randomly.
Pair Corralation between BJs Wholesale and Takara Holdings
Assuming the 90 days horizon BJs Wholesale is expected to generate 1.47 times less return on investment than Takara Holdings. In addition to that, BJs Wholesale is 1.03 times more volatile than Takara Holdings. It trades about 0.07 of its total potential returns per unit of risk. Takara Holdings is currently generating about 0.11 per unit of volatility. If you would invest 625.00 in Takara Holdings on September 3, 2024 and sell it today you would earn a total of 145.00 from holding Takara Holdings or generate 23.2% 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. Takara Holdings
Performance |
| Timeline |
| BJs Wholesale Club |
| Takara Holdings |
BJs Wholesale and Takara Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Wholesale and Takara Holdings
The main advantage of trading using opposite BJs Wholesale and Takara Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Wholesale position performs unexpectedly, Takara Holdings 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 Takara Holdings will offset losses from the drop in Takara Holdings' long position.| BJs Wholesale vs. Walmart | BJs Wholesale vs. Superior Plus Corp | BJs Wholesale vs. NMI Holdings | BJs Wholesale vs. Origin Agritech |
| Takara Holdings vs. Aedas Homes SA | Takara Holdings vs. American Homes 4 | Takara Holdings vs. Addus HomeCare | Takara Holdings vs. Siamgas And Petrochemicals |
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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