Correlation Between BJs Restaurants and Cheche Group
Can any of the company-specific risk be diversified away by investing in both BJs Restaurants and Cheche Group 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 Cheche Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BJs Restaurants and Cheche Group Class, you can compare the effects of market volatilities on BJs Restaurants and Cheche Group 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 Cheche Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Restaurants and Cheche Group.
Diversification Opportunities for BJs Restaurants and Cheche Group
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between BJs and Cheche is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and Cheche Group Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheche Group Class 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 Cheche Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cheche Group Class has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and Cheche Group go up and down completely randomly.
Pair Corralation between BJs Restaurants and Cheche Group
Given the investment horizon of 90 days BJs Restaurants is expected to generate 13.42 times less return on investment than Cheche Group. But when comparing it to its historical volatility, BJs Restaurants is 10.78 times less risky than Cheche Group. It trades about 0.02 of its potential returns per unit of risk. Cheche Group Class is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,037 in Cheche Group Class on October 28, 2024 and sell it today you would lose (948.00) from holding Cheche Group Class or give up 91.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.72% |
| Values | Daily Returns |
BJs Restaurants vs. Cheche Group Class
Performance |
| Timeline |
| BJs Restaurants |
| Cheche Group Class |
BJs Restaurants and Cheche Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Restaurants and Cheche Group
The main advantage of trading using opposite BJs Restaurants and Cheche Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Restaurants position performs unexpectedly, Cheche Group 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 Cheche Group will offset losses from the drop in Cheche Group'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 |
| Cheche Group vs. DHI Group | Cheche Group vs. Sphere Entertainment Co | Cheche Group vs. Joint Stock | Cheche Group vs. Paranovus Entertainment Technology |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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