Correlation Between AOYAMA TRADING and BJs Wholesale
Can any of the company-specific risk be diversified away by investing in both AOYAMA TRADING and BJs Wholesale 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 AOYAMA TRADING and BJs Wholesale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AOYAMA TRADING and BJs Wholesale Club, you can compare the effects of market volatilities on AOYAMA TRADING and BJs Wholesale 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 AOYAMA TRADING with a short position of BJs Wholesale. Check out your portfolio center. Please also check ongoing floating volatility patterns of AOYAMA TRADING and BJs Wholesale.
Diversification Opportunities for AOYAMA TRADING and BJs Wholesale
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AOYAMA and BJs is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding AOYAMA TRADING and BJs Wholesale Club in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BJs Wholesale Club and AOYAMA TRADING 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 AOYAMA TRADING are associated (or correlated) with BJs Wholesale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BJs Wholesale Club has no effect on the direction of AOYAMA TRADING i.e., AOYAMA TRADING and BJs Wholesale go up and down completely randomly.
Pair Corralation between AOYAMA TRADING and BJs Wholesale
Assuming the 90 days horizon AOYAMA TRADING is expected to generate 3.08 times more return on investment than BJs Wholesale. However, AOYAMA TRADING is 3.08 times more volatile than BJs Wholesale Club. It trades about 0.39 of its potential returns per unit of risk. BJs Wholesale Club is currently generating about 0.31 per unit of risk. If you would invest 780.00 in AOYAMA TRADING on August 28, 2024 and sell it today you would earn a total of 620.00 from holding AOYAMA TRADING or generate 79.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AOYAMA TRADING vs. BJs Wholesale Club
Performance |
| Timeline |
| AOYAMA TRADING |
| BJs Wholesale Club |
AOYAMA TRADING and BJs Wholesale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AOYAMA TRADING and BJs Wholesale
The main advantage of trading using opposite AOYAMA TRADING and BJs Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AOYAMA TRADING position performs unexpectedly, BJs Wholesale 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 BJs Wholesale will offset losses from the drop in BJs Wholesale's long position.| AOYAMA TRADING vs. Magnachip Semiconductor | AOYAMA TRADING vs. Grupo Carso SAB | AOYAMA TRADING vs. SIEM OFFSHORE NEW | AOYAMA TRADING vs. ELMOS SEMICONDUCTOR |
| BJs Wholesale vs. Superior Plus Corp | BJs Wholesale vs. NMI Holdings | BJs Wholesale vs. Origin Agritech | BJs Wholesale vs. SIVERS SEMICONDUCTORS AB |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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