Correlation Between BJs Restaurants and Pinstripes Holdings
Can any of the company-specific risk be diversified away by investing in both BJs Restaurants and Pinstripes Holdings 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 Pinstripes Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BJs Restaurants and Pinstripes Holdings, you can compare the effects of market volatilities on BJs Restaurants and Pinstripes Holdings 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 Pinstripes Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Restaurants and Pinstripes Holdings.
Diversification Opportunities for BJs Restaurants and Pinstripes Holdings
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BJs and Pinstripes is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and Pinstripes Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinstripes Holdings 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 Pinstripes Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinstripes Holdings has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and Pinstripes Holdings go up and down completely randomly.
Pair Corralation between BJs Restaurants and Pinstripes Holdings
Given the investment horizon of 90 days BJs Restaurants is expected to generate 0.27 times more return on investment than Pinstripes Holdings. However, BJs Restaurants is 3.73 times less risky than Pinstripes Holdings. It trades about -0.05 of its potential returns per unit of risk. Pinstripes Holdings is currently generating about -0.26 per unit of risk. If you would invest 3,721 in BJs Restaurants on October 26, 2024 and sell it today you would lose (184.00) from holding BJs Restaurants or give up 4.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BJs Restaurants vs. Pinstripes Holdings
Performance |
| Timeline |
| BJs Restaurants |
| Pinstripes Holdings |
BJs Restaurants and Pinstripes Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Restaurants and Pinstripes Holdings
The main advantage of trading using opposite BJs Restaurants and Pinstripes Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Restaurants position performs unexpectedly, Pinstripes Holdings 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 Pinstripes Holdings will offset losses from the drop in Pinstripes Holdings' long position.| BJs Restaurants vs. Chipotle Mexican Grill | BJs Restaurants vs. Dominos Pizza Common | BJs Restaurants vs. Yum Brands | BJs Restaurants vs. The Wendys Co |
| Pinstripes Holdings vs. Summit Hotel Properties | Pinstripes Holdings vs. Starbucks | Pinstripes Holdings vs. CECO Environmental Corp | Pinstripes Holdings vs. BJs Restaurants |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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