Correlation Between Chefs Warehouse and BJs Wholesale
Can any of the company-specific risk be diversified away by investing in both Chefs Warehouse 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 Chefs Warehouse and BJs Wholesale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Chefs Warehouse and BJs Wholesale Club, you can compare the effects of market volatilities on Chefs Warehouse 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 Chefs Warehouse with a short position of BJs Wholesale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chefs Warehouse and BJs Wholesale.
Diversification Opportunities for Chefs Warehouse and BJs Wholesale
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chefs and BJs is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding The Chefs Warehouse 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 Chefs Warehouse 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 The Chefs Warehouse 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 Chefs Warehouse i.e., Chefs Warehouse and BJs Wholesale go up and down completely randomly.
Pair Corralation between Chefs Warehouse and BJs Wholesale
Given the investment horizon of 90 days Chefs Warehouse is expected to generate 2.46 times less return on investment than BJs Wholesale. In addition to that, Chefs Warehouse is 1.14 times more volatile than BJs Wholesale Club. It trades about 0.08 of its total potential returns per unit of risk. BJs Wholesale Club is currently generating about 0.21 per unit of volatility. If you would invest 8,248 in BJs Wholesale Club on August 30, 2024 and sell it today you would earn a total of 1,429 from holding BJs Wholesale Club or generate 17.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Chefs Warehouse vs. BJs Wholesale Club
Performance |
| Timeline |
| Chefs Warehouse |
| BJs Wholesale Club |
Chefs Warehouse and BJs Wholesale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chefs Warehouse and BJs Wholesale
The main advantage of trading using opposite Chefs Warehouse and BJs Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chefs Warehouse 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.| Chefs Warehouse vs. US Foods Holding | Chefs Warehouse vs. Sysco | Chefs Warehouse vs. SpartanNash Co | Chefs Warehouse vs. Calavo Growers |
| BJs Wholesale vs. Dollar Tree | BJs Wholesale vs. Dicks Sporting Goods | BJs Wholesale vs. Williams Sonoma | BJs Wholesale vs. Dillards |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |