Correlation Between Joint Stock and BJs Restaurants
Can any of the company-specific risk be diversified away by investing in both Joint Stock 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 Joint Stock and BJs Restaurants into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Joint Stock and BJs Restaurants, you can compare the effects of market volatilities on Joint Stock 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 Joint Stock with a short position of BJs Restaurants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Joint Stock and BJs Restaurants.
Diversification Opportunities for Joint Stock and BJs Restaurants
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Joint and BJs is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Joint Stock and BJs Restaurants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BJs Restaurants and Joint Stock 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 Joint Stock 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 Joint Stock i.e., Joint Stock and BJs Restaurants go up and down completely randomly.
Pair Corralation between Joint Stock and BJs Restaurants
Given the investment horizon of 90 days Joint Stock is expected to under-perform the BJs Restaurants. But the stock apears to be less risky and, when comparing its historical volatility, Joint Stock is 1.08 times less risky than BJs Restaurants. The stock trades about -0.02 of its potential returns per unit of risk. The BJs Restaurants is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,504 in BJs Restaurants on August 29, 2024 and sell it today you would earn a total of 280.00 from holding BJs Restaurants or generate 7.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Joint Stock vs. BJs Restaurants
Performance |
| Timeline |
| Joint Stock |
| BJs Restaurants |
Joint Stock and BJs Restaurants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Joint Stock and BJs Restaurants
The main advantage of trading using opposite Joint Stock and BJs Restaurants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Joint Stock 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.| Joint Stock vs. Procter Gamble | Joint Stock vs. Pool Corporation | Joint Stock vs. SunOpta | Joint Stock vs. Estee Lauder Companies |
| BJs Restaurants vs. Jack In The | BJs Restaurants vs. Potbelly Co | BJs Restaurants vs. Rave Restaurant Group |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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