Correlation Between WESANA HEALTH and BJs Wholesale

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Can any of the company-specific risk be diversified away by investing in both WESANA HEALTH 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 WESANA HEALTH and BJs Wholesale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WESANA HEALTH HOLD and BJs Wholesale Club, you can compare the effects of market volatilities on WESANA HEALTH 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 WESANA HEALTH with a short position of BJs Wholesale. Check out your portfolio center. Please also check ongoing floating volatility patterns of WESANA HEALTH and BJs Wholesale.

Diversification Opportunities for WESANA HEALTH and BJs Wholesale

0.26
  Correlation Coefficient

Modest diversification

The 3 months correlation between WESANA and BJs is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding WESANA HEALTH HOLD 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 WESANA HEALTH 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 WESANA HEALTH HOLD 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 WESANA HEALTH i.e., WESANA HEALTH and BJs Wholesale go up and down completely randomly.

Pair Corralation between WESANA HEALTH and BJs Wholesale

If you would invest  0.15  in WESANA HEALTH HOLD on October 13, 2024 and sell it today you would earn a total of  0.00  from holding WESANA HEALTH HOLD or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy94.12%
ValuesDaily Returns

WESANA HEALTH HOLD  vs.  BJs Wholesale Club

 Performance 
       Timeline  
WESANA HEALTH HOLD 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days WESANA HEALTH HOLD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, WESANA HEALTH is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
BJs Wholesale Club 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in BJs Wholesale Club are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, BJs Wholesale reported solid returns over the last few months and may actually be approaching a breakup point.

WESANA HEALTH and BJs Wholesale Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with WESANA HEALTH and BJs Wholesale

The main advantage of trading using opposite WESANA HEALTH and BJs Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WESANA HEALTH 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.
The idea behind WESANA HEALTH HOLD and BJs Wholesale Club pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.

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