Correlation Between BJs Restaurants and Carmell Therapeutics
Can any of the company-specific risk be diversified away by investing in both BJs Restaurants and Carmell Therapeutics 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 Carmell Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BJs Restaurants and Carmell Therapeutics, you can compare the effects of market volatilities on BJs Restaurants and Carmell Therapeutics 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 Carmell Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Restaurants and Carmell Therapeutics.
Diversification Opportunities for BJs Restaurants and Carmell Therapeutics
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BJs and Carmell is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and Carmell Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carmell Therapeutics 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 Carmell Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carmell Therapeutics has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and Carmell Therapeutics go up and down completely randomly.
Pair Corralation between BJs Restaurants and Carmell Therapeutics
Given the investment horizon of 90 days BJs Restaurants is expected to generate 0.07 times more return on investment than Carmell Therapeutics. However, BJs Restaurants is 13.56 times less risky than Carmell Therapeutics. It trades about -0.05 of its potential returns per unit of risk. Carmell Therapeutics is currently generating about -0.3 per unit of risk. If you would invest 3,697 in BJs Restaurants on September 14, 2024 and sell it today you would lose (115.00) from holding BJs Restaurants or give up 3.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 38.1% |
| Values | Daily Returns |
BJs Restaurants vs. Carmell Therapeutics
Performance |
| Timeline |
| BJs Restaurants |
| Carmell Therapeutics |
BJs Restaurants and Carmell Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Restaurants and Carmell Therapeutics
The main advantage of trading using opposite BJs Restaurants and Carmell Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Restaurants position performs unexpectedly, Carmell Therapeutics 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 Carmell Therapeutics will offset losses from the drop in Carmell Therapeutics' long position.The idea behind BJs Restaurants and Carmell Therapeutics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Carmell Therapeutics vs. Ryanair Holdings PLC | Carmell Therapeutics vs. BJs Restaurants | Carmell Therapeutics vs. Dine Brands Global | Carmell Therapeutics vs. United Guardian |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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