Correlation Between BJs Wholesale and Adecoagro
Can any of the company-specific risk be diversified away by investing in both BJs Wholesale and Adecoagro 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 Adecoagro 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 Adecoagro SA, you can compare the effects of market volatilities on BJs Wholesale and Adecoagro 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 Adecoagro. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Wholesale and Adecoagro.
Diversification Opportunities for BJs Wholesale and Adecoagro
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BJs and Adecoagro is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding BJs Wholesale Club and Adecoagro SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adecoagro SA 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 Adecoagro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adecoagro SA has no effect on the direction of BJs Wholesale i.e., BJs Wholesale and Adecoagro go up and down completely randomly.
Pair Corralation between BJs Wholesale and Adecoagro
Allowing for the 90-day total investment horizon BJs Wholesale Club is expected to generate 1.64 times more return on investment than Adecoagro. However, BJs Wholesale is 1.64 times more volatile than Adecoagro SA. It trades about 0.31 of its potential returns per unit of risk. Adecoagro SA is currently generating about 0.08 per unit of risk. If you would invest 8,820 in BJs Wholesale Club on November 3, 2024 and sell it today you would earn a total of 1,085 from holding BJs Wholesale Club or generate 12.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
BJs Wholesale Club vs. Adecoagro SA
Performance |
| Timeline |
| BJs Wholesale Club |
| Adecoagro SA |
BJs Wholesale and Adecoagro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Wholesale and Adecoagro
The main advantage of trading using opposite BJs Wholesale and Adecoagro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Wholesale position performs unexpectedly, Adecoagro 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 Adecoagro will offset losses from the drop in Adecoagro's long position.| BJs Wholesale vs. Dollar Tree | BJs Wholesale vs. Dicks Sporting Goods | BJs Wholesale vs. Williams Sonoma | BJs Wholesale vs. Dillards |
| Adecoagro vs. Limoneira Co | Adecoagro vs. Dole PLC | Adecoagro vs. Alico Inc | Adecoagro vs. Cal Maine Foods |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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