Correlation Between BJs Restaurants and Contextlogic
Can any of the company-specific risk be diversified away by investing in both BJs Restaurants and Contextlogic 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 Contextlogic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BJs Restaurants and Contextlogic, you can compare the effects of market volatilities on BJs Restaurants and Contextlogic 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 Contextlogic. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Restaurants and Contextlogic.
Diversification Opportunities for BJs Restaurants and Contextlogic
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BJs and Contextlogic is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and Contextlogic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Contextlogic 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 Contextlogic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Contextlogic has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and Contextlogic go up and down completely randomly.
Pair Corralation between BJs Restaurants and Contextlogic
Given the investment horizon of 90 days BJs Restaurants is expected to generate 88.75 times less return on investment than Contextlogic. But when comparing it to its historical volatility, BJs Restaurants is 1.19 times less risky than Contextlogic. It trades about 0.0 of its potential returns per unit of risk. Contextlogic is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 629.00 in Contextlogic on November 6, 2024 and sell it today you would earn a total of 148.00 from holding Contextlogic or generate 23.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BJs Restaurants vs. Contextlogic
Performance |
| Timeline |
| BJs Restaurants |
| Contextlogic |
BJs Restaurants and Contextlogic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Restaurants and Contextlogic
The main advantage of trading using opposite BJs Restaurants and Contextlogic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Restaurants position performs unexpectedly, Contextlogic 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 Contextlogic will offset losses from the drop in Contextlogic'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 |
| Contextlogic vs. MOGU Inc | Contextlogic vs. Anterix | Contextlogic vs. Sea | Contextlogic vs. Playtika Holding Corp |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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