Correlation Between Nihon Kohden and BJs Restaurants
Can any of the company-specific risk be diversified away by investing in both Nihon Kohden 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 Nihon Kohden and BJs Restaurants into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nihon Kohden and BJs Restaurants, you can compare the effects of market volatilities on Nihon Kohden 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 Nihon Kohden with a short position of BJs Restaurants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nihon Kohden and BJs Restaurants.
Diversification Opportunities for Nihon Kohden and BJs Restaurants
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nihon and BJs is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nihon Kohden and BJs Restaurants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BJs Restaurants and Nihon Kohden 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 Nihon Kohden 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 Nihon Kohden i.e., Nihon Kohden and BJs Restaurants go up and down completely randomly.
Pair Corralation between Nihon Kohden and BJs Restaurants
Assuming the 90 days horizon Nihon Kohden is expected to generate 31.35 times more return on investment than BJs Restaurants. However, Nihon Kohden is 31.35 times more volatile than BJs Restaurants. It trades about 0.07 of its potential returns per unit of risk. BJs Restaurants is currently generating about 0.03 per unit of risk. If you would invest 2,154 in Nihon Kohden on September 4, 2024 and sell it today you would earn a total of 0.00 from holding Nihon Kohden or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 29.49% |
| Values | Daily Returns |
Nihon Kohden vs. BJs Restaurants
Performance |
| Timeline |
| Nihon Kohden |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| BJs Restaurants |
Nihon Kohden and BJs Restaurants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nihon Kohden and BJs Restaurants
The main advantage of trading using opposite Nihon Kohden and BJs Restaurants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nihon Kohden 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.| Nihon Kohden vs. The Coca Cola | Nihon Kohden vs. Sealed Air | Nihon Kohden vs. Mativ Holdings | Nihon Kohden vs. Ecovyst |
| BJs Restaurants vs. Dine Brands Global | BJs Restaurants vs. Brinker International | BJs Restaurants vs. Bloomin Brands | BJs Restaurants vs. The Cheesecake Factory |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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