Correlation Between BLUESCOPE STEEL and BJs Wholesale
Can any of the company-specific risk be diversified away by investing in both BLUESCOPE STEEL 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 BLUESCOPE STEEL and BJs Wholesale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BLUESCOPE STEEL and BJs Wholesale Club, you can compare the effects of market volatilities on BLUESCOPE STEEL 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 BLUESCOPE STEEL with a short position of BJs Wholesale. Check out your portfolio center. Please also check ongoing floating volatility patterns of BLUESCOPE STEEL and BJs Wholesale.
Diversification Opportunities for BLUESCOPE STEEL and BJs Wholesale
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BLUESCOPE and BJs is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding BLUESCOPE STEEL 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 BLUESCOPE 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 BLUESCOPE STEEL 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 BLUESCOPE STEEL i.e., BLUESCOPE STEEL and BJs Wholesale go up and down completely randomly.
Pair Corralation between BLUESCOPE STEEL and BJs Wholesale
Assuming the 90 days trading horizon BLUESCOPE STEEL is expected to generate 2.81 times less return on investment than BJs Wholesale. In addition to that, BLUESCOPE STEEL is 1.25 times more volatile than BJs Wholesale Club. It trades about 0.09 of its total potential returns per unit of risk. BJs Wholesale Club is currently generating about 0.32 per unit of volatility. If you would invest 7,750 in BJs Wholesale Club on August 30, 2024 and sell it today you would earn a total of 1,400 from holding BJs Wholesale Club or generate 18.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
BLUESCOPE STEEL vs. BJs Wholesale Club
Performance |
| Timeline |
| BLUESCOPE STEEL |
| BJs Wholesale Club |
BLUESCOPE STEEL and BJs Wholesale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BLUESCOPE STEEL and BJs Wholesale
The main advantage of trading using opposite BLUESCOPE STEEL and BJs Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BLUESCOPE STEEL 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.| BLUESCOPE STEEL vs. Gladstone Investment | BLUESCOPE STEEL vs. PennyMac Mortgage Investment | BLUESCOPE STEEL vs. Carsales | BLUESCOPE STEEL vs. Vastned Retail NV |
| BJs Wholesale vs. Walmart | BJs Wholesale vs. Walmart | BJs Wholesale vs. Wal Mart de Mxico | BJs Wholesale vs. Dollar General |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |