Correlation Between C F and BJs Wholesale
Can any of the company-specific risk be diversified away by investing in both C F and BJs Wholesale 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 C F and BJs Wholesale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between C F FINL and BJs Wholesale Club, you can compare the effects of market volatilities on C F and BJs Wholesale 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 C F with a short position of BJs Wholesale. Check out your portfolio center. Please also check ongoing floating volatility patterns of C F and BJs Wholesale.
Diversification Opportunities for C F and BJs Wholesale
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between CFF and BJs is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding C F FINL and BJs Wholesale Club in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BJs Wholesale Club and C F 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 C F FINL are associated (or correlated) with BJs Wholesale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BJs Wholesale Club has no effect on the direction of C F i.e., C F and BJs Wholesale go up and down completely randomly.
Pair Corralation between C F and BJs Wholesale
Assuming the 90 days horizon C F is expected to generate 1.81 times less return on investment than BJs Wholesale. In addition to that, C F is 1.75 times more volatile than BJs Wholesale Club. It trades about 0.03 of its total potential returns per unit of risk. BJs Wholesale Club is currently generating about 0.1 per unit of volatility. If you would invest 6,050 in BJs Wholesale Club on September 12, 2024 and sell it today you would earn a total of 2,950 from holding BJs Wholesale Club or generate 48.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.6% |
| Values | Daily Returns |
C F FINL vs. BJs Wholesale Club
Performance |
| Timeline |
| C F FINL |
| BJs Wholesale Club |
C F and BJs Wholesale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with C F and BJs Wholesale
The main advantage of trading using opposite C F and BJs Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if C F position performs unexpectedly, BJs Wholesale 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 BJs Wholesale will offset losses from the drop in BJs Wholesale's long position.| C F vs. POSBO UNSPADRS20YC1 | C F vs. Postal Savings Bank | C F vs. UTD OV BK LOC ADR1 | C F vs. Superior Plus Corp |
| BJs Wholesale vs. Walmart | BJs Wholesale vs. Costco Wholesale | BJs Wholesale vs. Dollarama | BJs Wholesale vs. Superior Plus Corp |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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