Correlation Between BJs Restaurants and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both BJs Restaurants and Harmony Gold 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 Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BJs Restaurants and Harmony Gold Mining, you can compare the effects of market volatilities on BJs Restaurants and Harmony Gold 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 Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Restaurants and Harmony Gold.
Diversification Opportunities for BJs Restaurants and Harmony Gold
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between BJs and Harmony is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and Harmony Gold Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harmony Gold Mining 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 Harmony Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harmony Gold Mining has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and Harmony Gold go up and down completely randomly.
Pair Corralation between BJs Restaurants and Harmony Gold
Given the investment horizon of 90 days BJs Restaurants is expected to generate 13.41 times less return on investment than Harmony Gold. But when comparing it to its historical volatility, BJs Restaurants is 1.87 times less risky than Harmony Gold. It trades about 0.03 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 827.00 in Harmony Gold Mining on November 3, 2024 and sell it today you would earn a total of 122.00 from holding Harmony Gold Mining or generate 14.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BJs Restaurants vs. Harmony Gold Mining
Performance |
| Timeline |
| BJs Restaurants |
| Harmony Gold Mining |
BJs Restaurants and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Restaurants and Harmony Gold
The main advantage of trading using opposite BJs Restaurants and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Restaurants position performs unexpectedly, Harmony Gold 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 Harmony Gold will offset losses from the drop in Harmony Gold'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 |
| Harmony Gold vs. Fernhill Beverage | Harmony Gold vs. Bridgford Foods | Harmony Gold vs. Grocery Outlet Holding | Harmony Gold vs. Romana Food Brands |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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