Correlation Between BJs Restaurants and International Game
Can any of the company-specific risk be diversified away by investing in both BJs Restaurants and International Game 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 International Game into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BJs Restaurants and International Game Technology, you can compare the effects of market volatilities on BJs Restaurants and International Game 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 International Game. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Restaurants and International Game.
Diversification Opportunities for BJs Restaurants and International Game
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BJs and International is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and International Game Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Game 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 International Game. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Game has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and International Game go up and down completely randomly.
Pair Corralation between BJs Restaurants and International Game
Given the investment horizon of 90 days BJs Restaurants is expected to generate 1.64 times more return on investment than International Game. However, BJs Restaurants is 1.64 times more volatile than International Game Technology. It trades about -0.07 of its potential returns per unit of risk. International Game Technology is currently generating about -0.24 per unit of risk. If you would invest 3,730 in BJs Restaurants on August 27, 2024 and sell it today you would lose (196.00) from holding BJs Restaurants or give up 5.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BJs Restaurants vs. International Game Technology
Performance |
| Timeline |
| BJs Restaurants |
| International Game |
BJs Restaurants and International Game Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Restaurants and International Game
The main advantage of trading using opposite BJs Restaurants and International Game positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Restaurants position performs unexpectedly, International Game 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 International Game will offset losses from the drop in International Game'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 |
| International Game vs. Accel Entertainment | International Game vs. PlayAGS | International Game vs. Everi Holdings | International Game vs. Light Wonder |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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