Correlation Between BJs Restaurants and Morgan Stanley
Can any of the company-specific risk be diversified away by investing in both BJs Restaurants and Morgan Stanley 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 Morgan Stanley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BJs Restaurants and Morgan Stanley Direct, you can compare the effects of market volatilities on BJs Restaurants and Morgan Stanley 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 Morgan Stanley. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Restaurants and Morgan Stanley.
Diversification Opportunities for BJs Restaurants and Morgan Stanley
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between BJs and Morgan is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and Morgan Stanley Direct in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morgan Stanley Direct 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 Morgan Stanley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Morgan Stanley Direct has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and Morgan Stanley go up and down completely randomly.
Pair Corralation between BJs Restaurants and Morgan Stanley
Given the investment horizon of 90 days BJs Restaurants is expected to generate 1.24 times less return on investment than Morgan Stanley. In addition to that, BJs Restaurants is 1.65 times more volatile than Morgan Stanley Direct. It trades about 0.02 of its total potential returns per unit of risk. Morgan Stanley Direct is currently generating about 0.04 per unit of volatility. If you would invest 1,862 in Morgan Stanley Direct on October 27, 2024 and sell it today you would earn a total of 217.00 from holding Morgan Stanley Direct or generate 11.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 51.01% |
| Values | Daily Returns |
BJs Restaurants vs. Morgan Stanley Direct
Performance |
| Timeline |
| BJs Restaurants |
| Morgan Stanley Direct |
BJs Restaurants and Morgan Stanley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Restaurants and Morgan Stanley
The main advantage of trading using opposite BJs Restaurants and Morgan Stanley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Restaurants position performs unexpectedly, Morgan Stanley 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 Morgan Stanley will offset losses from the drop in Morgan Stanley'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 |
| Morgan Stanley vs. Sellas Life Sciences | Morgan Stanley vs. nLIGHT Inc | Morgan Stanley vs. Summit Therapeutics PLC | Morgan Stanley vs. Allient |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |