Correlation Between Ecotel Communication and BJs Restaurants
Can any of the company-specific risk be diversified away by investing in both Ecotel Communication 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 Ecotel Communication and BJs Restaurants into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ecotel communication ag and BJs Restaurants, you can compare the effects of market volatilities on Ecotel Communication 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 Ecotel Communication with a short position of BJs Restaurants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecotel Communication and BJs Restaurants.
Diversification Opportunities for Ecotel Communication and BJs Restaurants
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ecotel and BJs is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding ecotel communication ag and BJs Restaurants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BJs Restaurants and Ecotel Communication 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 ecotel communication ag 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 Ecotel Communication i.e., Ecotel Communication and BJs Restaurants go up and down completely randomly.
Pair Corralation between Ecotel Communication and BJs Restaurants
Assuming the 90 days trading horizon ecotel communication ag is expected to under-perform the BJs Restaurants. In addition to that, Ecotel Communication is 1.06 times more volatile than BJs Restaurants. It trades about -0.02 of its total potential returns per unit of risk. BJs Restaurants is currently generating about 0.03 per unit of volatility. If you would invest 2,780 in BJs Restaurants on October 16, 2024 and sell it today you would earn a total of 560.00 from holding BJs Restaurants or generate 20.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ecotel communication ag vs. BJs Restaurants
Performance |
| Timeline |
| ecotel communication |
| BJs Restaurants |
Ecotel Communication and BJs Restaurants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecotel Communication and BJs Restaurants
The main advantage of trading using opposite Ecotel Communication and BJs Restaurants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecotel Communication 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.| Ecotel Communication vs. Indutrade AB | Ecotel Communication vs. Salesforce | Ecotel Communication vs. YOOMA WELLNESS INC | Ecotel Communication vs. Acadia Healthcare |
| BJs Restaurants vs. Lamar Advertising | BJs Restaurants vs. GEELY AUTOMOBILE | BJs Restaurants vs. ecotel communication ag | BJs Restaurants vs. MOBILE FACTORY INC |
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 Stocks Directory module to find actively traded stocks across global markets.
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