Correlation Between BJs Restaurants and Mitsubishi UFJ
Can any of the company-specific risk be diversified away by investing in both BJs Restaurants and Mitsubishi UFJ 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 Mitsubishi UFJ into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BJs Restaurants and Mitsubishi UFJ Lease, you can compare the effects of market volatilities on BJs Restaurants and Mitsubishi UFJ 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 Mitsubishi UFJ. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Restaurants and Mitsubishi UFJ.
Diversification Opportunities for BJs Restaurants and Mitsubishi UFJ
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BJs and Mitsubishi is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and Mitsubishi UFJ Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitsubishi UFJ 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 Mitsubishi UFJ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitsubishi UFJ Lease has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and Mitsubishi UFJ go up and down completely randomly.
Pair Corralation between BJs Restaurants and Mitsubishi UFJ
Given the investment horizon of 90 days BJs Restaurants is expected to generate 2.72 times less return on investment than Mitsubishi UFJ. But when comparing it to its historical volatility, BJs Restaurants is 1.89 times less risky than Mitsubishi UFJ. It trades about 0.04 of its potential returns per unit of risk. Mitsubishi UFJ Lease is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 848.00 in Mitsubishi UFJ Lease on August 30, 2024 and sell it today you would earn a total of 348.00 from holding Mitsubishi UFJ Lease or generate 41.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 56.6% |
| Values | Daily Returns |
BJs Restaurants vs. Mitsubishi UFJ Lease
Performance |
| Timeline |
| BJs Restaurants |
| Mitsubishi UFJ Lease |
BJs Restaurants and Mitsubishi UFJ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Restaurants and Mitsubishi UFJ
The main advantage of trading using opposite BJs Restaurants and Mitsubishi UFJ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Restaurants position performs unexpectedly, Mitsubishi UFJ 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 Mitsubishi UFJ will offset losses from the drop in Mitsubishi UFJ's long position.| BJs Restaurants vs. Jack In The | BJs Restaurants vs. Potbelly Co | BJs Restaurants vs. Rave Restaurant Group |
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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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