Correlation Between BJs Wholesale and Above Food
Can any of the company-specific risk be diversified away by investing in both BJs Wholesale and Above Food 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 BJs Wholesale and Above Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BJs Wholesale Club and Above Food Ingredients, you can compare the effects of market volatilities on BJs Wholesale and Above Food 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 BJs Wholesale with a short position of Above Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Wholesale and Above Food.
Diversification Opportunities for BJs Wholesale and Above Food
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between BJs and Above is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding BJs Wholesale Club and Above Food Ingredients in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Above Food Ingredients and BJs Wholesale 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 BJs Wholesale Club are associated (or correlated) with Above Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Above Food Ingredients has no effect on the direction of BJs Wholesale i.e., BJs Wholesale and Above Food go up and down completely randomly.
Pair Corralation between BJs Wholesale and Above Food
Allowing for the 90-day total investment horizon BJs Wholesale is expected to generate 5.11 times less return on investment than Above Food. But when comparing it to its historical volatility, BJs Wholesale Club is 4.36 times less risky than Above Food. It trades about 0.14 of its potential returns per unit of risk. Above Food Ingredients is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 45.00 in Above Food Ingredients on November 27, 2024 and sell it today you would earn a total of 8.00 from holding Above Food Ingredients or generate 17.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BJs Wholesale Club vs. Above Food Ingredients
Performance |
| Timeline |
| BJs Wholesale Club |
| Above Food Ingredients |
BJs Wholesale and Above Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Wholesale and Above Food
The main advantage of trading using opposite BJs Wholesale and Above Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Wholesale position performs unexpectedly, Above Food 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 Above Food will offset losses from the drop in Above Food's long position.| BJs Wholesale vs. Dollar Tree | BJs Wholesale vs. Dicks Sporting Goods | BJs Wholesale vs. Williams Sonoma | BJs Wholesale vs. Dillards |
| Above Food vs. Dennys Corp | Above Food vs. LB Foster | Above Food vs. Golden Energy Offshore | Above Food vs. Melco Resorts Entertainment |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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