Correlation Between BJs Restaurants and Barings BDC
Can any of the company-specific risk be diversified away by investing in both BJs Restaurants and Barings BDC 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 Restaurants and Barings BDC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BJs Restaurants and Barings BDC, you can compare the effects of market volatilities on BJs Restaurants and Barings BDC 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 Restaurants with a short position of Barings BDC. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Restaurants and Barings BDC.
Diversification Opportunities for BJs Restaurants and Barings BDC
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BJs and Barings is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and Barings BDC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings BDC and BJs Restaurants 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 Restaurants are associated (or correlated) with Barings BDC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings BDC has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and Barings BDC go up and down completely randomly.
Pair Corralation between BJs Restaurants and Barings BDC
Given the investment horizon of 90 days BJs Restaurants is expected to generate 1.02 times less return on investment than Barings BDC. In addition to that, BJs Restaurants is 2.66 times more volatile than Barings BDC. It trades about 0.17 of its total potential returns per unit of risk. Barings BDC is currently generating about 0.45 per unit of volatility. If you would invest 941.00 in Barings BDC on September 4, 2024 and sell it today you would earn a total of 92.00 from holding Barings BDC or generate 9.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BJs Restaurants vs. Barings BDC
Performance |
| Timeline |
| BJs Restaurants |
| Barings BDC |
BJs Restaurants and Barings BDC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Restaurants and Barings BDC
The main advantage of trading using opposite BJs Restaurants and Barings BDC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Restaurants position performs unexpectedly, Barings BDC 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 Barings BDC will offset losses from the drop in Barings BDC's long position.| BJs Restaurants vs. Dine Brands Global | BJs Restaurants vs. Brinker International | BJs Restaurants vs. Bloomin Brands | BJs Restaurants vs. The Cheesecake Factory |
| Barings BDC vs. Runway Growth Finance | Barings BDC vs. OneMain Holdings | Barings BDC vs. Navient Corp | Barings BDC vs. Oaktree Specialty Lending |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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