Correlation Between Highway Holdings and BJs Restaurants
Can any of the company-specific risk be diversified away by investing in both Highway Holdings 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 Highway Holdings and BJs Restaurants into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highway Holdings Limited and BJs Restaurants, you can compare the effects of market volatilities on Highway Holdings 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 Highway Holdings with a short position of BJs Restaurants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highway Holdings and BJs Restaurants.
Diversification Opportunities for Highway Holdings and BJs Restaurants
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Highway and BJs is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Highway Holdings Limited and BJs Restaurants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BJs Restaurants and Highway Holdings 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 Highway Holdings Limited 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 Highway Holdings i.e., Highway Holdings and BJs Restaurants go up and down completely randomly.
Pair Corralation between Highway Holdings and BJs Restaurants
Given the investment horizon of 90 days Highway Holdings is expected to generate 1.04 times less return on investment than BJs Restaurants. In addition to that, Highway Holdings is 1.35 times more volatile than BJs Restaurants. It trades about 0.04 of its total potential returns per unit of risk. BJs Restaurants is currently generating about 0.05 per unit of volatility. If you would invest 3,175 in BJs Restaurants on October 26, 2024 and sell it today you would earn a total of 412.00 from holding BJs Restaurants or generate 12.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.19% |
| Values | Daily Returns |
Highway Holdings Limited vs. BJs Restaurants
Performance |
| Timeline |
| Highway Holdings |
| BJs Restaurants |
Highway Holdings and BJs Restaurants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highway Holdings and BJs Restaurants
The main advantage of trading using opposite Highway Holdings and BJs Restaurants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highway Holdings 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.| Highway Holdings vs. Deswell Industries | Highway Holdings vs. Euro Tech Holdings | Highway Holdings vs. China Natural Resources | Highway Holdings vs. Arts Way Manufacturing Co |
| BJs Restaurants vs. Chipotle Mexican Grill | BJs Restaurants vs. Dominos Pizza Common | BJs Restaurants vs. Yum Brands | BJs Restaurants vs. The Wendys Co |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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