Correlation Between BJs Wholesale and Kimberly Clark
Can any of the company-specific risk be diversified away by investing in both BJs Wholesale and Kimberly Clark 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 Kimberly Clark 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 Kimberly Clark, you can compare the effects of market volatilities on BJs Wholesale and Kimberly Clark 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 Kimberly Clark. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Wholesale and Kimberly Clark.
Diversification Opportunities for BJs Wholesale and Kimberly Clark
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BJs and Kimberly is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding BJs Wholesale Club and Kimberly Clark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kimberly Clark 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 Kimberly Clark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kimberly Clark has no effect on the direction of BJs Wholesale i.e., BJs Wholesale and Kimberly Clark go up and down completely randomly.
Pair Corralation between BJs Wholesale and Kimberly Clark
Allowing for the 90-day total investment horizon BJs Wholesale Club is expected to generate 1.57 times more return on investment than Kimberly Clark. However, BJs Wholesale is 1.57 times more volatile than Kimberly Clark. It trades about 0.09 of its potential returns per unit of risk. Kimberly Clark is currently generating about 0.08 per unit of risk. If you would invest 7,304 in BJs Wholesale Club on August 27, 2024 and sell it today you would earn a total of 2,370 from holding BJs Wholesale Club or generate 32.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BJs Wholesale Club vs. Kimberly Clark
Performance |
| Timeline |
| BJs Wholesale Club |
| Kimberly Clark |
BJs Wholesale and Kimberly Clark Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Wholesale and Kimberly Clark
The main advantage of trading using opposite BJs Wholesale and Kimberly Clark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Wholesale position performs unexpectedly, Kimberly Clark 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 Kimberly Clark will offset losses from the drop in Kimberly Clark's long position.| BJs Wholesale vs. Hf Foods Group | BJs Wholesale vs. Innovative Food Hldg | BJs Wholesale vs. Calavo Growers | BJs Wholesale vs. The Chefs Warehouse |
| Kimberly Clark vs. Unilever PLC ADR | Kimberly Clark vs. Estee Lauder Companies | Kimberly Clark vs. ELF Beauty | Kimberly Clark vs. Coty Inc |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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