Correlation Between BJs Restaurants and Boston Omaha
Can any of the company-specific risk be diversified away by investing in both BJs Restaurants and Boston Omaha 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 Boston Omaha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BJs Restaurants and Boston Omaha Corp, you can compare the effects of market volatilities on BJs Restaurants and Boston Omaha 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 Boston Omaha. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Restaurants and Boston Omaha.
Diversification Opportunities for BJs Restaurants and Boston Omaha
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BJs and Boston is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and Boston Omaha Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Omaha Corp 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 Boston Omaha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boston Omaha Corp has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and Boston Omaha go up and down completely randomly.
Pair Corralation between BJs Restaurants and Boston Omaha
Given the investment horizon of 90 days BJs Restaurants is expected to generate 1.36 times more return on investment than Boston Omaha. However, BJs Restaurants is 1.36 times more volatile than Boston Omaha Corp. It trades about 0.02 of its potential returns per unit of risk. Boston Omaha Corp is currently generating about -0.05 per unit of risk. If you would invest 3,458 in BJs Restaurants on November 7, 2024 and sell it today you would earn a total of 227.00 from holding BJs Restaurants or generate 6.56% 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. Boston Omaha Corp
Performance |
| Timeline |
| BJs Restaurants |
| Boston Omaha Corp |
BJs Restaurants and Boston Omaha Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Restaurants and Boston Omaha
The main advantage of trading using opposite BJs Restaurants and Boston Omaha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Restaurants position performs unexpectedly, Boston Omaha 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 Boston Omaha will offset losses from the drop in Boston Omaha'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 |
| Boston Omaha vs. Integral Ad Science | Boston Omaha vs. Cardlytics | Boston Omaha vs. Cimpress NV | Boston Omaha vs. QuinStreet |
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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