Correlation Between BJs Restaurants and Chuys Holdings
Can any of the company-specific risk be diversified away by investing in both BJs Restaurants and Chuys 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 Restaurants and Chuys Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BJs Restaurants and Chuys Holdings, you can compare the effects of market volatilities on BJs Restaurants and Chuys 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 Restaurants with a short position of Chuys Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Restaurants and Chuys Holdings.
Diversification Opportunities for BJs Restaurants and Chuys Holdings
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BJs and Chuys is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and Chuys Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chuys Holdings 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 Chuys Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chuys Holdings has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and Chuys Holdings go up and down completely randomly.
Pair Corralation between BJs Restaurants and Chuys Holdings
Given the investment horizon of 90 days BJs Restaurants is expected to generate 1.13 times less return on investment than Chuys Holdings. But when comparing it to its historical volatility, BJs Restaurants is 1.08 times less risky than Chuys Holdings. It trades about 0.03 of its potential returns per unit of risk. Chuys Holdings is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,050 in Chuys Holdings on August 27, 2024 and sell it today you would earn a total of 698.00 from holding Chuys Holdings or generate 22.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 93.75% |
| Values | Daily Returns |
BJs Restaurants vs. Chuys Holdings
Performance |
| Timeline |
| BJs Restaurants |
| Chuys Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Strong
BJs Restaurants and Chuys Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Restaurants and Chuys Holdings
The main advantage of trading using opposite BJs Restaurants and Chuys Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Restaurants position performs unexpectedly, Chuys 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 Chuys Holdings will offset losses from the drop in Chuys Holdings' long position.| BJs Restaurants vs. Dine Brands Global | BJs Restaurants vs. Brinker International | BJs Restaurants vs. Bloomin Brands | BJs Restaurants vs. The Cheesecake Factory |
| Chuys Holdings vs. Brinker International | Chuys Holdings vs. Bloomin Brands | Chuys Holdings vs. FAT Brands | Chuys Holdings vs. Potbelly Co |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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