Correlation Between Prom Resources and BJs Restaurants
Can any of the company-specific risk be diversified away by investing in both Prom Resources 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 Prom Resources and BJs Restaurants into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prom Resources and BJs Restaurants, you can compare the effects of market volatilities on Prom Resources 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 Prom Resources with a short position of BJs Restaurants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prom Resources and BJs Restaurants.
Diversification Opportunities for Prom Resources and BJs Restaurants
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Prom and BJs is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Prom Resources and BJs Restaurants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BJs Restaurants and Prom Resources 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 Prom Resources 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 Prom Resources i.e., Prom Resources and BJs Restaurants go up and down completely randomly.
Pair Corralation between Prom Resources and BJs Restaurants
If you would invest 3,510 in BJs Restaurants on September 3, 2024 and sell it today you would earn a total of 334.00 from holding BJs Restaurants or generate 9.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 0.6% |
| Values | Daily Returns |
Prom Resources vs. BJs Restaurants
Performance |
| Timeline |
| Prom Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| BJs Restaurants |
Prom Resources and BJs Restaurants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prom Resources and BJs Restaurants
The main advantage of trading using opposite Prom Resources and BJs Restaurants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prom Resources 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.| Prom Resources vs. Grillit | Prom Resources vs. ZA Group | Prom Resources vs. Blue Water Global | Prom Resources vs. BJs Restaurants |
| 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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