Correlation Between BJs Restaurants and Skillful Craftsman
Can any of the company-specific risk be diversified away by investing in both BJs Restaurants and Skillful Craftsman 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 Skillful Craftsman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BJs Restaurants and Skillful Craftsman Education, you can compare the effects of market volatilities on BJs Restaurants and Skillful Craftsman 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 Skillful Craftsman. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Restaurants and Skillful Craftsman.
Diversification Opportunities for BJs Restaurants and Skillful Craftsman
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BJs and Skillful is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and Skillful Craftsman Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skillful Craftsman 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 Skillful Craftsman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skillful Craftsman has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and Skillful Craftsman go up and down completely randomly.
Pair Corralation between BJs Restaurants and Skillful Craftsman
Given the investment horizon of 90 days BJs Restaurants is expected to generate 0.64 times more return on investment than Skillful Craftsman. However, BJs Restaurants is 1.56 times less risky than Skillful Craftsman. It trades about 0.03 of its potential returns per unit of risk. Skillful Craftsman Education is currently generating about 0.02 per unit of risk. If you would invest 2,952 in BJs Restaurants on August 31, 2024 and sell it today you would earn a total of 832.00 from holding BJs Restaurants or generate 28.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BJs Restaurants vs. Skillful Craftsman Education
Performance |
| Timeline |
| BJs Restaurants |
| Skillful Craftsman |
BJs Restaurants and Skillful Craftsman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Restaurants and Skillful Craftsman
The main advantage of trading using opposite BJs Restaurants and Skillful Craftsman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Restaurants position performs unexpectedly, Skillful Craftsman 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 Skillful Craftsman will offset losses from the drop in Skillful Craftsman'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 |
| Skillful Craftsman vs. Wah Fu Education | Skillful Craftsman vs. Golden Sun Education | Skillful Craftsman vs. Elite Education Group | Skillful Craftsman vs. QuantaSing Group Limited |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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