Correlation Between Dalata Hotel and BJs Restaurants
Can any of the company-specific risk be diversified away by investing in both Dalata Hotel and BJs Restaurants 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 Dalata Hotel and BJs Restaurants into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dalata Hotel Group and BJs Restaurants, you can compare the effects of market volatilities on Dalata Hotel and BJs Restaurants 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 Dalata Hotel with a short position of BJs Restaurants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dalata Hotel and BJs Restaurants.
Diversification Opportunities for Dalata Hotel and BJs Restaurants
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dalata and BJs is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Dalata Hotel Group and BJs Restaurants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BJs Restaurants and Dalata Hotel 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 Dalata Hotel Group are associated (or correlated) with BJs Restaurants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BJs Restaurants has no effect on the direction of Dalata Hotel i.e., Dalata Hotel and BJs Restaurants go up and down completely randomly.
Pair Corralation between Dalata Hotel and BJs Restaurants
If you would invest 3,744 in BJs Restaurants on August 31, 2024 and sell it today you would earn a total of 40.00 from holding BJs Restaurants or generate 1.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dalata Hotel Group vs. BJs Restaurants
Performance |
| Timeline |
| Dalata Hotel Group |
| BJs Restaurants |
Dalata Hotel and BJs Restaurants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dalata Hotel and BJs Restaurants
The main advantage of trading using opposite Dalata Hotel and BJs Restaurants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dalata Hotel position performs unexpectedly, BJs Restaurants 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 Restaurants will offset losses from the drop in BJs Restaurants' long position.| Dalata Hotel vs. NH Foods Ltd | Dalata Hotel vs. Getty Realty | Dalata Hotel vs. Beyond Meat | Dalata Hotel vs. Marfrig Global Foods |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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