Correlation Between BJs Wholesale and Healthy Choice
Can any of the company-specific risk be diversified away by investing in both BJs Wholesale and Healthy Choice 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 Healthy Choice 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 Healthy Choice Wellness, you can compare the effects of market volatilities on BJs Wholesale and Healthy Choice 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 Healthy Choice. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Wholesale and Healthy Choice.
Diversification Opportunities for BJs Wholesale and Healthy Choice
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BJs and Healthy is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding BJs Wholesale Club and Healthy Choice Wellness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healthy Choice Wellness 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 Healthy Choice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Healthy Choice Wellness has no effect on the direction of BJs Wholesale i.e., BJs Wholesale and Healthy Choice go up and down completely randomly.
Pair Corralation between BJs Wholesale and Healthy Choice
Allowing for the 90-day total investment horizon BJs Wholesale is expected to generate 39.27 times less return on investment than Healthy Choice. But when comparing it to its historical volatility, BJs Wholesale Club is 63.36 times less risky than Healthy Choice. It trades about 0.15 of its potential returns per unit of risk. Healthy Choice Wellness is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 0.00 in Healthy Choice Wellness on November 2, 2024 and sell it today you would earn a total of 99.00 from holding Healthy Choice Wellness or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 92.23% |
| Values | Daily Returns |
BJs Wholesale Club vs. Healthy Choice Wellness
Performance |
| Timeline |
| BJs Wholesale Club |
| Healthy Choice Wellness |
BJs Wholesale and Healthy Choice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Wholesale and Healthy Choice
The main advantage of trading using opposite BJs Wholesale and Healthy Choice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Wholesale position performs unexpectedly, Healthy Choice 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 Healthy Choice will offset losses from the drop in Healthy Choice's long position.| BJs Wholesale vs. Dollar Tree | BJs Wholesale vs. Dicks Sporting Goods | BJs Wholesale vs. Williams Sonoma | BJs Wholesale vs. Dillards |
| Healthy Choice vs. Oatly Group AB | Healthy Choice vs. Fevertree Drinks Plc | Healthy Choice vs. Loud Beverage Group | Healthy Choice vs. Westrock Coffee |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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