Correlation Between BJs Restaurants and Zapp Electric
Can any of the company-specific risk be diversified away by investing in both BJs Restaurants and Zapp Electric 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 Zapp Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BJs Restaurants and Zapp Electric Vehicles, you can compare the effects of market volatilities on BJs Restaurants and Zapp Electric 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 Zapp Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Restaurants and Zapp Electric.
Diversification Opportunities for BJs Restaurants and Zapp Electric
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between BJs and Zapp is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and Zapp Electric Vehicles in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zapp Electric Vehicles 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 Zapp Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zapp Electric Vehicles has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and Zapp Electric go up and down completely randomly.
Pair Corralation between BJs Restaurants and Zapp Electric
Given the investment horizon of 90 days BJs Restaurants is expected to under-perform the Zapp Electric. But the stock apears to be less risky and, when comparing its historical volatility, BJs Restaurants is 5.58 times less risky than Zapp Electric. The stock trades about -0.03 of its potential returns per unit of risk. The Zapp Electric Vehicles is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 139.00 in Zapp Electric Vehicles on November 4, 2024 and sell it today you would earn a total of 2.00 from holding Zapp Electric Vehicles or generate 1.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
BJs Restaurants vs. Zapp Electric Vehicles
Performance |
| Timeline |
| BJs Restaurants |
| Zapp Electric Vehicles |
BJs Restaurants and Zapp Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Restaurants and Zapp Electric
The main advantage of trading using opposite BJs Restaurants and Zapp Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Restaurants position performs unexpectedly, Zapp Electric 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 Zapp Electric will offset losses from the drop in Zapp Electric'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 |
| Zapp Electric vs. Toro Co | Zapp Electric vs. Inter Parfums | Zapp Electric vs. Flutter Entertainment plc | Zapp Electric vs. Integrated Media Technology |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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