Correlation Between International Consolidated and BJs Restaurants
Can any of the company-specific risk be diversified away by investing in both International Consolidated 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 International Consolidated and BJs Restaurants into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Consolidated Airlines and BJs Restaurants, you can compare the effects of market volatilities on International Consolidated 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 International Consolidated with a short position of BJs Restaurants. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Consolidated and BJs Restaurants.
Diversification Opportunities for International Consolidated and BJs Restaurants
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between International and BJs is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding International Consolidated Air and BJs Restaurants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BJs Restaurants and International Consolidated 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 International Consolidated Airlines 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 International Consolidated i.e., International Consolidated and BJs Restaurants go up and down completely randomly.
Pair Corralation between International Consolidated and BJs Restaurants
Assuming the 90 days horizon International Consolidated Airlines is expected to generate 0.98 times more return on investment than BJs Restaurants. However, International Consolidated Airlines is 1.02 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 0.06 per unit of risk. If you would invest 759.00 in International Consolidated Airlines on October 23, 2024 and sell it today you would earn a total of 14.00 from holding International Consolidated Airlines or generate 1.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
International Consolidated Air vs. BJs Restaurants
Performance |
| Timeline |
| International Consolidated |
| BJs Restaurants |
International Consolidated and BJs Restaurants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Consolidated and BJs Restaurants
The main advantage of trading using opposite International Consolidated and BJs Restaurants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Consolidated 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.| International Consolidated vs. BIO Key International | International Consolidated vs. LogicMark | International Consolidated vs. Knightscope | International Consolidated vs. Guardforce AI Co |
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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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