Correlation Between Pick N and BJs Wholesale
Can any of the company-specific risk be diversified away by investing in both Pick N 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 Pick N and BJs Wholesale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pick n Pay and BJs Wholesale Club, you can compare the effects of market volatilities on Pick N 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 Pick N with a short position of BJs Wholesale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pick N and BJs Wholesale.
Diversification Opportunities for Pick N and BJs Wholesale
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pick and BJs is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Pick n Pay 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 Pick N 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 Pick n Pay 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 Pick N i.e., Pick N and BJs Wholesale go up and down completely randomly.
Pair Corralation between Pick N and BJs Wholesale
Assuming the 90 days horizon Pick n Pay is expected to generate 2.33 times more return on investment than BJs Wholesale. However, Pick N is 2.33 times more volatile than BJs Wholesale Club. It trades about 0.05 of its potential returns per unit of risk. BJs Wholesale Club is currently generating about 0.1 per unit of risk. If you would invest 115.00 in Pick n Pay on September 2, 2024 and sell it today you would earn a total of 40.00 from holding Pick n Pay or generate 34.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pick n Pay vs. BJs Wholesale Club
Performance |
| Timeline |
| Pick n Pay |
| BJs Wholesale Club |
Pick N and BJs Wholesale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pick N and BJs Wholesale
The main advantage of trading using opposite Pick N and BJs Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pick N 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.| Pick N vs. Taiwan Semiconductor Manufacturing | Pick N vs. AUSTEVOLL SEAFOOD | Pick N vs. Tower Semiconductor | Pick N vs. CN MODERN DAIRY |
| 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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