Correlation Between Wayside Technology and BJs Restaurants
Can any of the company-specific risk be diversified away by investing in both Wayside Technology 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 Wayside Technology and BJs Restaurants into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wayside Technology Group and BJs Restaurants, you can compare the effects of market volatilities on Wayside Technology 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 Wayside Technology with a short position of BJs Restaurants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wayside Technology and BJs Restaurants.
Diversification Opportunities for Wayside Technology and BJs Restaurants
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wayside and BJs is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Wayside Technology Group and BJs Restaurants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BJs Restaurants and Wayside Technology 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 Wayside Technology Group 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 Wayside Technology i.e., Wayside Technology and BJs Restaurants go up and down completely randomly.
Pair Corralation between Wayside Technology and BJs Restaurants
Assuming the 90 days horizon Wayside Technology Group is expected to generate 1.12 times more return on investment than BJs Restaurants. However, Wayside Technology is 1.12 times more volatile than BJs Restaurants. It trades about 0.1 of its potential returns per unit of risk. BJs Restaurants is currently generating about 0.03 per unit of risk. If you would invest 3,141 in Wayside Technology Group on October 16, 2024 and sell it today you would earn a total of 8,859 from holding Wayside Technology Group or generate 282.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wayside Technology Group vs. BJs Restaurants
Performance |
| Timeline |
| Wayside Technology |
| BJs Restaurants |
Wayside Technology and BJs Restaurants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wayside Technology and BJs Restaurants
The main advantage of trading using opposite Wayside Technology and BJs Restaurants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wayside Technology 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.| Wayside Technology vs. Lendlease Group | Wayside Technology vs. Sixt Leasing SE | Wayside Technology vs. Global Ship Lease | Wayside Technology vs. MOVIE GAMES SA |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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