Correlation Between Auburn National and BJs Restaurants
Can any of the company-specific risk be diversified away by investing in both Auburn National 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 Auburn National and BJs Restaurants into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auburn National Bancorporation and BJs Restaurants, you can compare the effects of market volatilities on Auburn National 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 Auburn National with a short position of BJs Restaurants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auburn National and BJs Restaurants.
Diversification Opportunities for Auburn National and BJs Restaurants
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Auburn and BJs is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Auburn National Bancorp. and BJs Restaurants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BJs Restaurants and Auburn National 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 Auburn National Bancorporation 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 Auburn National i.e., Auburn National and BJs Restaurants go up and down completely randomly.
Pair Corralation between Auburn National and BJs Restaurants
Given the investment horizon of 90 days Auburn National Bancorporation is expected to generate 0.76 times more return on investment than BJs Restaurants. However, Auburn National Bancorporation is 1.32 times less risky than BJs Restaurants. It trades about 0.18 of its potential returns per unit of risk. BJs Restaurants is currently generating about 0.03 per unit of risk. If you would invest 2,149 in Auburn National Bancorporation on September 13, 2024 and sell it today you would earn a total of 151.00 from holding Auburn National Bancorporation or generate 7.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Auburn National Bancorp. vs. BJs Restaurants
Performance |
| Timeline |
| Auburn National Banc |
| BJs Restaurants |
Auburn National and BJs Restaurants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auburn National and BJs Restaurants
The main advantage of trading using opposite Auburn National and BJs Restaurants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auburn National 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.| Auburn National vs. Home Federal Bancorp | Auburn National vs. LINKBANCORP | Auburn National vs. Affinity Bancshares | Auburn National vs. Southern California Bancorp |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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