Correlation Between BJs Restaurants and High Performance
Can any of the company-specific risk be diversified away by investing in both BJs Restaurants and High Performance 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 High Performance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BJs Restaurants and High Performance Beverages, you can compare the effects of market volatilities on BJs Restaurants and High Performance 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 High Performance. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Restaurants and High Performance.
Diversification Opportunities for BJs Restaurants and High Performance
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BJs and High is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and High Performance Beverages in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Performance Bev 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 High Performance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Performance Bev has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and High Performance go up and down completely randomly.
Pair Corralation between BJs Restaurants and High Performance
Given the investment horizon of 90 days BJs Restaurants is expected to generate 1605.9 times less return on investment than High Performance. But when comparing it to its historical volatility, BJs Restaurants is 130.44 times less risky than High Performance. It trades about 0.03 of its potential returns per unit of risk. High Performance Beverages is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 0.01 in High Performance Beverages on September 19, 2024 and sell it today you would lose (0.01) from holding High Performance Beverages or give up 100.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BJs Restaurants vs. High Performance Beverages
Performance |
| Timeline |
| BJs Restaurants |
| High Performance Bev |
BJs Restaurants and High Performance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Restaurants and High Performance
The main advantage of trading using opposite BJs Restaurants and High Performance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Restaurants position performs unexpectedly, High Performance 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 High Performance will offset losses from the drop in High Performance'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 |
| High Performance vs. V Group | High Performance vs. Fbec Worldwide | High Performance vs. Hiru Corporation | High Performance vs. Alkame Holdings |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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