Correlation Between BJs Restaurants and Ruths Hospitality
Can any of the company-specific risk be diversified away by investing in both BJs Restaurants and Ruths Hospitality 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 Ruths Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BJs Restaurants and Ruths Hospitality Group, you can compare the effects of market volatilities on BJs Restaurants and Ruths Hospitality 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 Ruths Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Restaurants and Ruths Hospitality.
Diversification Opportunities for BJs Restaurants and Ruths Hospitality
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BJs and Ruths is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and Ruths Hospitality Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ruths Hospitality 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 Ruths Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ruths Hospitality has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and Ruths Hospitality go up and down completely randomly.
Pair Corralation between BJs Restaurants and Ruths Hospitality
Given the investment horizon of 90 days BJs Restaurants is expected to generate 5.03 times less return on investment than Ruths Hospitality. But when comparing it to its historical volatility, BJs Restaurants is 1.64 times less risky than Ruths Hospitality. It trades about 0.03 of its potential returns per unit of risk. Ruths Hospitality Group is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,677 in Ruths Hospitality Group on November 1, 2024 and sell it today you would earn a total of 472.00 from holding Ruths Hospitality Group or generate 28.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 14.35% |
| Values | Daily Returns |
BJs Restaurants vs. Ruths Hospitality Group
Performance |
| Timeline |
| BJs Restaurants |
| Ruths Hospitality |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
BJs Restaurants and Ruths Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Restaurants and Ruths Hospitality
The main advantage of trading using opposite BJs Restaurants and Ruths Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Restaurants position performs unexpectedly, Ruths Hospitality 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 Ruths Hospitality will offset losses from the drop in Ruths Hospitality'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 |
| Ruths Hospitality vs. Dine Brands Global | Ruths Hospitality vs. Bloomin Brands | Ruths Hospitality vs. BJs Restaurants | Ruths Hospitality vs. The Cheesecake Factory |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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