Correlation Between ALGOMA STEEL and BJs Restaurants
Can any of the company-specific risk be diversified away by investing in both ALGOMA STEEL and BJs Restaurants 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 ALGOMA STEEL and BJs Restaurants into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ALGOMA STEEL GROUP and BJs Restaurants, you can compare the effects of market volatilities on ALGOMA STEEL and BJs Restaurants 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 ALGOMA STEEL with a short position of BJs Restaurants. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALGOMA STEEL and BJs Restaurants.
Diversification Opportunities for ALGOMA STEEL and BJs Restaurants
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ALGOMA and BJs is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding ALGOMA STEEL GROUP and BJs Restaurants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BJs Restaurants and ALGOMA STEEL 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 ALGOMA STEEL GROUP are associated (or correlated) with BJs Restaurants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BJs Restaurants has no effect on the direction of ALGOMA STEEL i.e., ALGOMA STEEL and BJs Restaurants go up and down completely randomly.
Pair Corralation between ALGOMA STEEL and BJs Restaurants
Assuming the 90 days horizon ALGOMA STEEL GROUP is expected to generate 0.92 times more return on investment than BJs Restaurants. However, ALGOMA STEEL GROUP is 1.09 times less risky than BJs Restaurants. It trades about 0.06 of its potential returns per unit of risk. BJs Restaurants is currently generating about 0.03 per unit of risk. If you would invest 545.00 in ALGOMA STEEL GROUP on September 3, 2024 and sell it today you would earn a total of 455.00 from holding ALGOMA STEEL GROUP or generate 83.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ALGOMA STEEL GROUP vs. BJs Restaurants
Performance |
| Timeline |
| ALGOMA STEEL GROUP |
| BJs Restaurants |
ALGOMA STEEL and BJs Restaurants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ALGOMA STEEL and BJs Restaurants
The main advantage of trading using opposite ALGOMA STEEL and BJs Restaurants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALGOMA STEEL position performs unexpectedly, BJs Restaurants 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 Restaurants will offset losses from the drop in BJs Restaurants' long position.| ALGOMA STEEL vs. ArcelorMittal | ALGOMA STEEL vs. Steel Dynamics | ALGOMA STEEL vs. NIPPON STEEL SPADR | ALGOMA STEEL vs. POSCO Holdings |
| BJs Restaurants vs. Apollo Investment Corp | BJs Restaurants vs. REINET INVESTMENTS SCA | BJs Restaurants vs. ECHO INVESTMENT ZY | BJs Restaurants vs. MGIC INVESTMENT |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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