Correlation Between BJs Restaurants and First Ship
Can any of the company-specific risk be diversified away by investing in both BJs Restaurants and First Ship 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 First Ship into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BJs Restaurants and First Ship Lease, you can compare the effects of market volatilities on BJs Restaurants and First Ship 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 First Ship. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Restaurants and First Ship.
Diversification Opportunities for BJs Restaurants and First Ship
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BJs and First is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and First Ship Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Ship Lease 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 First Ship. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Ship Lease has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and First Ship go up and down completely randomly.
Pair Corralation between BJs Restaurants and First Ship
If you would invest 3,457 in BJs Restaurants on September 13, 2024 and sell it today you would earn a total of 156.50 from holding BJs Restaurants or generate 4.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BJs Restaurants vs. First Ship Lease
Performance |
| Timeline |
| BJs Restaurants |
| First Ship Lease |
BJs Restaurants and First Ship Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Restaurants and First Ship
The main advantage of trading using opposite BJs Restaurants and First Ship positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Restaurants position performs unexpectedly, First Ship 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 First Ship will offset losses from the drop in First Ship's long position.The idea behind BJs Restaurants and First Ship Lease 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.| First Ship vs. Tradeweb Markets | First Ship vs. Simon Property Group | First Ship vs. Newpark Resources | First Ship vs. Fast Retailing 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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