Correlation Between BJs Restaurants and Treasury Wine
Can any of the company-specific risk be diversified away by investing in both BJs Restaurants and Treasury Wine 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 Treasury Wine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BJs Restaurants and Treasury Wine Estates, you can compare the effects of market volatilities on BJs Restaurants and Treasury Wine 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 Treasury Wine. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Restaurants and Treasury Wine.
Diversification Opportunities for BJs Restaurants and Treasury Wine
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BJs and Treasury is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and Treasury Wine Estates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Treasury Wine Estates 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 Treasury Wine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Treasury Wine Estates has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and Treasury Wine go up and down completely randomly.
Pair Corralation between BJs Restaurants and Treasury Wine
Given the investment horizon of 90 days BJs Restaurants is expected to generate 1.48 times more return on investment than Treasury Wine. However, BJs Restaurants is 1.48 times more volatile than Treasury Wine Estates. It trades about 0.07 of its potential returns per unit of risk. Treasury Wine Estates is currently generating about -0.22 per unit of risk. If you would invest 3,709 in BJs Restaurants on September 1, 2024 and sell it today you would earn a total of 135.00 from holding BJs Restaurants or generate 3.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BJs Restaurants vs. Treasury Wine Estates
Performance |
| Timeline |
| BJs Restaurants |
| Treasury Wine Estates |
BJs Restaurants and Treasury Wine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Restaurants and Treasury Wine
The main advantage of trading using opposite BJs Restaurants and Treasury Wine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Restaurants position performs unexpectedly, Treasury Wine 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 Treasury Wine will offset losses from the drop in Treasury Wine'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 |
| Treasury Wine vs. Pernod Ricard SA | Treasury Wine vs. Willamette Valley Vineyards | Treasury Wine vs. MGP Ingredients | Treasury Wine vs. Duckhorn Portfolio |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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