Correlation Between USWE SPORTS and BJs Wholesale
Can any of the company-specific risk be diversified away by investing in both USWE SPORTS 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 USWE SPORTS and BJs Wholesale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between USWE SPORTS AB and BJs Wholesale Club, you can compare the effects of market volatilities on USWE SPORTS 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 USWE SPORTS with a short position of BJs Wholesale. Check out your portfolio center. Please also check ongoing floating volatility patterns of USWE SPORTS and BJs Wholesale.
Diversification Opportunities for USWE SPORTS and BJs Wholesale
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between USWE and BJs is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding USWE SPORTS AB 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 USWE SPORTS 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 USWE SPORTS AB 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 USWE SPORTS i.e., USWE SPORTS and BJs Wholesale go up and down completely randomly.
Pair Corralation between USWE SPORTS and BJs Wholesale
Assuming the 90 days horizon USWE SPORTS AB is expected to under-perform the BJs Wholesale. In addition to that, USWE SPORTS is 1.96 times more volatile than BJs Wholesale Club. It trades about -0.03 of its total potential returns per unit of risk. BJs Wholesale Club is currently generating about 0.07 per unit of volatility. If you would invest 7,950 in BJs Wholesale Club on September 2, 2024 and sell it today you would earn a total of 1,100 from holding BJs Wholesale Club or generate 13.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
USWE SPORTS AB vs. BJs Wholesale Club
Performance |
| Timeline |
| USWE SPORTS AB |
| BJs Wholesale Club |
USWE SPORTS and BJs Wholesale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with USWE SPORTS and BJs Wholesale
The main advantage of trading using opposite USWE SPORTS and BJs Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USWE SPORTS 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.| USWE SPORTS vs. Li Ning Company | USWE SPORTS vs. Trip Group Limited | USWE SPORTS vs. Superior Plus Corp | USWE SPORTS vs. NMI Holdings |
| 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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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