Correlation Between HEMISPHERE EGY and BJs Restaurants
Can any of the company-specific risk be diversified away by investing in both HEMISPHERE EGY 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 HEMISPHERE EGY and BJs Restaurants into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HEMISPHERE EGY and BJs Restaurants, you can compare the effects of market volatilities on HEMISPHERE EGY 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 HEMISPHERE EGY with a short position of BJs Restaurants. Check out your portfolio center. Please also check ongoing floating volatility patterns of HEMISPHERE EGY and BJs Restaurants.
Diversification Opportunities for HEMISPHERE EGY and BJs Restaurants
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between HEMISPHERE and BJs is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding HEMISPHERE EGY and BJs Restaurants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BJs Restaurants and HEMISPHERE EGY 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 HEMISPHERE EGY 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 HEMISPHERE EGY i.e., HEMISPHERE EGY and BJs Restaurants go up and down completely randomly.
Pair Corralation between HEMISPHERE EGY and BJs Restaurants
Assuming the 90 days trading horizon HEMISPHERE EGY is expected to generate 1.74 times less return on investment than BJs Restaurants. But when comparing it to its historical volatility, HEMISPHERE EGY is 1.54 times less risky than BJs Restaurants. It trades about 0.06 of its potential returns per unit of risk. BJs Restaurants is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 3,460 in BJs Restaurants on November 29, 2024 and sell it today you would earn a total of 100.00 from holding BJs Restaurants or generate 2.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
HEMISPHERE EGY vs. BJs Restaurants
Performance |
| Timeline |
| HEMISPHERE EGY |
| BJs Restaurants |
HEMISPHERE EGY and BJs Restaurants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HEMISPHERE EGY and BJs Restaurants
The main advantage of trading using opposite HEMISPHERE EGY and BJs Restaurants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HEMISPHERE EGY 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.| HEMISPHERE EGY vs. International Consolidated Airlines | HEMISPHERE EGY vs. SINGAPORE AIRLINES | HEMISPHERE EGY vs. SOUTHWEST AIRLINES | HEMISPHERE EGY vs. LEONS FURNITURE |
| BJs Restaurants vs. QLEANAIR AB SK 50 | BJs Restaurants vs. Air Lease | BJs Restaurants vs. RYANAIR HLDGS ADR | BJs Restaurants vs. Sixt Leasing SE |
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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