Correlation Between Natural Health and BJs Wholesale
Can any of the company-specific risk be diversified away by investing in both Natural Health and BJs Wholesale 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 Natural Health and BJs Wholesale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Natural Health Trends and BJs Wholesale Club, you can compare the effects of market volatilities on Natural Health and BJs Wholesale 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 Natural Health with a short position of BJs Wholesale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natural Health and BJs Wholesale.
Diversification Opportunities for Natural Health and BJs Wholesale
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Natural and BJs is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Natural Health Trends and BJs Wholesale Club in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BJs Wholesale Club and Natural Health 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 Natural Health Trends are associated (or correlated) with BJs Wholesale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BJs Wholesale Club has no effect on the direction of Natural Health i.e., Natural Health and BJs Wholesale go up and down completely randomly.
Pair Corralation between Natural Health and BJs Wholesale
Assuming the 90 days trading horizon Natural Health Trends is expected to generate 1.7 times more return on investment than BJs Wholesale. However, Natural Health is 1.7 times more volatile than BJs Wholesale Club. It trades about 0.06 of its potential returns per unit of risk. BJs Wholesale Club is currently generating about 0.04 per unit of risk. If you would invest 265.00 in Natural Health Trends on September 2, 2024 and sell it today you would earn a total of 245.00 from holding Natural Health Trends or generate 92.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Natural Health Trends vs. BJs Wholesale Club
Performance |
| Timeline |
| Natural Health Trends |
| BJs Wholesale Club |
Natural Health and BJs Wholesale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natural Health and BJs Wholesale
The main advantage of trading using opposite Natural Health and BJs Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natural Health position performs unexpectedly, BJs Wholesale 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 Wholesale will offset losses from the drop in BJs Wholesale's long position.| Natural Health vs. NURAN WIRELESS INC | Natural Health vs. YOOMA WELLNESS INC | Natural Health vs. Haverty Furniture Companies | Natural Health vs. LGI Homes |
| BJs Wholesale vs. Superior Plus Corp | BJs Wholesale vs. NMI Holdings | BJs Wholesale vs. Origin Agritech | BJs Wholesale vs. SIVERS SEMICONDUCTORS AB |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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