Correlation Between BJs Restaurants and Golden Heaven
Can any of the company-specific risk be diversified away by investing in both BJs Restaurants and Golden Heaven 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 Golden Heaven into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BJs Restaurants and Golden Heaven Group, you can compare the effects of market volatilities on BJs Restaurants and Golden Heaven 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 Golden Heaven. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Restaurants and Golden Heaven.
Diversification Opportunities for BJs Restaurants and Golden Heaven
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BJs and Golden is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and Golden Heaven Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Heaven Group 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 Golden Heaven. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Heaven Group has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and Golden Heaven go up and down completely randomly.
Pair Corralation between BJs Restaurants and Golden Heaven
Given the investment horizon of 90 days BJs Restaurants is expected to generate 0.39 times more return on investment than Golden Heaven. However, BJs Restaurants is 2.57 times less risky than Golden Heaven. It trades about 0.01 of its potential returns per unit of risk. Golden Heaven Group is currently generating about -0.12 per unit of risk. If you would invest 3,730 in BJs Restaurants on August 27, 2024 and sell it today you would lose (9.00) from holding BJs Restaurants or give up 0.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BJs Restaurants vs. Golden Heaven Group
Performance |
| Timeline |
| BJs Restaurants |
| Golden Heaven Group |
BJs Restaurants and Golden Heaven Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Restaurants and Golden Heaven
The main advantage of trading using opposite BJs Restaurants and Golden Heaven positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Restaurants position performs unexpectedly, Golden Heaven 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 Golden Heaven will offset losses from the drop in Golden Heaven'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 |
| Golden Heaven vs. Anterix | Golden Heaven vs. Kandi Technologies Group | Golden Heaven vs. Verde Clean Fuels | Golden Heaven vs. Reservoir Media |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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