Correlation Between BJs Wholesale and Real Good
Can any of the company-specific risk be diversified away by investing in both BJs Wholesale and Real Good 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 Real Good 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 Real Good Food, you can compare the effects of market volatilities on BJs Wholesale and Real Good 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 Real Good. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Wholesale and Real Good.
Diversification Opportunities for BJs Wholesale and Real Good
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BJs and Real is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding BJs Wholesale Club and Real Good Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Real Good Food 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 Real Good. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Real Good Food has no effect on the direction of BJs Wholesale i.e., BJs Wholesale and Real Good go up and down completely randomly.
Pair Corralation between BJs Wholesale and Real Good
Allowing for the 90-day total investment horizon BJs Wholesale is expected to generate 103.29 times less return on investment than Real Good. But when comparing it to its historical volatility, BJs Wholesale Club is 120.8 times less risky than Real Good. It trades about 0.36 of its potential returns per unit of risk. Real Good Food is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 25.00 in Real Good Food on November 9, 2024 and sell it today you would lose (11.00) from holding Real Good Food or give up 44.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 30.0% |
| Values | Daily Returns |
BJs Wholesale Club vs. Real Good Food
Performance |
| Timeline |
| BJs Wholesale Club |
| Real Good Food |
Risk-Adjusted Performance
Modest
Weak | Strong |
BJs Wholesale and Real Good Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Wholesale and Real Good
The main advantage of trading using opposite BJs Wholesale and Real Good positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Wholesale position performs unexpectedly, Real Good 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 Real Good will offset losses from the drop in Real Good's long position.| BJs Wholesale vs. Dollar Tree | BJs Wholesale vs. Dicks Sporting Goods | BJs Wholesale vs. Williams Sonoma | BJs Wholesale vs. Dillards |
| Real Good vs. Seneca Foods Corp | Real Good vs. Central Garden Pet | Real Good vs. Central Garden Pet | Real Good vs. Natures Sunshine Products |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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