Correlation Between FAST RETAIL and BJs Restaurants
Can any of the company-specific risk be diversified away by investing in both FAST RETAIL 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 FAST RETAIL and BJs Restaurants into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FAST RETAIL ADR and BJs Restaurants, you can compare the effects of market volatilities on FAST RETAIL 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 FAST RETAIL with a short position of BJs Restaurants. Check out your portfolio center. Please also check ongoing floating volatility patterns of FAST RETAIL and BJs Restaurants.
Diversification Opportunities for FAST RETAIL and BJs Restaurants
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between FAST and BJs is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding FAST RETAIL ADR and BJs Restaurants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BJs Restaurants and FAST RETAIL 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 FAST RETAIL ADR 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 FAST RETAIL i.e., FAST RETAIL and BJs Restaurants go up and down completely randomly.
Pair Corralation between FAST RETAIL and BJs Restaurants
Assuming the 90 days trading horizon FAST RETAIL ADR is expected to generate 0.78 times more return on investment than BJs Restaurants. However, FAST RETAIL ADR is 1.28 times less risky than BJs Restaurants. It trades about 0.07 of its potential returns per unit of risk. BJs Restaurants is currently generating about 0.04 per unit of risk. If you would invest 2,427 in FAST RETAIL ADR on October 14, 2024 and sell it today you would earn a total of 693.00 from holding FAST RETAIL ADR or generate 28.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FAST RETAIL ADR vs. BJs Restaurants
Performance |
| Timeline |
| FAST RETAIL ADR |
| BJs Restaurants |
FAST RETAIL and BJs Restaurants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FAST RETAIL and BJs Restaurants
The main advantage of trading using opposite FAST RETAIL and BJs Restaurants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FAST RETAIL 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.| FAST RETAIL vs. DELTA AIR LINES | FAST RETAIL vs. JD SPORTS FASH | FAST RETAIL vs. CHINA SOUTHN AIR H | FAST RETAIL vs. Altair Engineering |
| BJs Restaurants vs. FAST RETAIL ADR | BJs Restaurants vs. Australian Agricultural | BJs Restaurants vs. MARKET VECTR RETAIL | BJs Restaurants vs. National Retail Properties |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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