Correlation Between BJs Wholesale and Corporate Office
Can any of the company-specific risk be diversified away by investing in both BJs Wholesale and Corporate Office 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 Corporate Office 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 Corporate Office Properties, you can compare the effects of market volatilities on BJs Wholesale and Corporate Office 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 Corporate Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Wholesale and Corporate Office.
Diversification Opportunities for BJs Wholesale and Corporate Office
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BJs and Corporate is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding BJs Wholesale Club and Corporate Office Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corporate Office Pro 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 Corporate Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corporate Office Pro has no effect on the direction of BJs Wholesale i.e., BJs Wholesale and Corporate Office go up and down completely randomly.
Pair Corralation between BJs Wholesale and Corporate Office
Assuming the 90 days horizon BJs Wholesale Club is expected to generate 1.21 times more return on investment than Corporate Office. However, BJs Wholesale is 1.21 times more volatile than Corporate Office Properties. It trades about 0.04 of its potential returns per unit of risk. Corporate Office Properties is currently generating about -0.21 per unit of risk. If you would invest 9,200 in BJs Wholesale Club on October 17, 2024 and sell it today you would earn a total of 100.00 from holding BJs Wholesale Club or generate 1.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BJs Wholesale Club vs. Corporate Office Properties
Performance |
| Timeline |
| BJs Wholesale Club |
| Corporate Office Pro |
BJs Wholesale and Corporate Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Wholesale and Corporate Office
The main advantage of trading using opposite BJs Wholesale and Corporate Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Wholesale position performs unexpectedly, Corporate Office 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 Corporate Office will offset losses from the drop in Corporate Office's long position.| BJs Wholesale vs. COMBA TELECOM SYST | BJs Wholesale vs. Chengdu PUTIAN Telecommunications | BJs Wholesale vs. MCEWEN MINING INC | BJs Wholesale vs. China Communications Services |
| Corporate Office vs. betterU Education Corp | Corporate Office vs. CHINA EDUCATION GROUP | Corporate Office vs. Tower One Wireless | Corporate Office vs. BJs Wholesale Club |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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