Correlation Between BJs Wholesale and Leafly Holdings
Can any of the company-specific risk be diversified away by investing in both BJs Wholesale and Leafly Holdings 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 Leafly Holdings 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 Leafly Holdings, you can compare the effects of market volatilities on BJs Wholesale and Leafly Holdings 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 Leafly Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Wholesale and Leafly Holdings.
Diversification Opportunities for BJs Wholesale and Leafly Holdings
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BJs and Leafly is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding BJs Wholesale Club and Leafly Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leafly Holdings 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 Leafly Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leafly Holdings has no effect on the direction of BJs Wholesale i.e., BJs Wholesale and Leafly Holdings go up and down completely randomly.
Pair Corralation between BJs Wholesale and Leafly Holdings
Allowing for the 90-day total investment horizon BJs Wholesale Club is expected to generate 0.13 times more return on investment than Leafly Holdings. However, BJs Wholesale Club is 7.61 times less risky than Leafly Holdings. It trades about 0.05 of its potential returns per unit of risk. Leafly Holdings is currently generating about -0.2 per unit of risk. If you would invest 9,377 in BJs Wholesale Club on October 21, 2024 and sell it today you would earn a total of 128.00 from holding BJs Wholesale Club or generate 1.37% 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. Leafly Holdings
Performance |
| Timeline |
| BJs Wholesale Club |
| Leafly Holdings |
BJs Wholesale and Leafly Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Wholesale and Leafly Holdings
The main advantage of trading using opposite BJs Wholesale and Leafly Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Wholesale position performs unexpectedly, Leafly Holdings 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 Leafly Holdings will offset losses from the drop in Leafly Holdings' long position.| BJs Wholesale vs. Dollar Tree | BJs Wholesale vs. Dicks Sporting Goods | BJs Wholesale vs. Williams Sonoma | BJs Wholesale vs. Dillards |
| Leafly Holdings vs. Leafly Holdings | Leafly Holdings vs. WM Technology | Leafly Holdings vs. Revelation Biosciences | Leafly Holdings vs. AEye 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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