Correlation Between Ping An and BJs Restaurants
Can any of the company-specific risk be diversified away by investing in both Ping An 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 Ping An and BJs Restaurants into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ping An Insurance and BJs Restaurants, you can compare the effects of market volatilities on Ping An 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 Ping An with a short position of BJs Restaurants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and BJs Restaurants.
Diversification Opportunities for Ping An and BJs Restaurants
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ping and BJs is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and BJs Restaurants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BJs Restaurants and Ping An 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 Ping An Insurance 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 Ping An i.e., Ping An and BJs Restaurants go up and down completely randomly.
Pair Corralation between Ping An and BJs Restaurants
Assuming the 90 days trading horizon Ping An Insurance is expected to generate 1.88 times more return on investment than BJs Restaurants. However, Ping An is 1.88 times more volatile than BJs Restaurants. It trades about 0.14 of its potential returns per unit of risk. BJs Restaurants is currently generating about 0.04 per unit of risk. If you would invest 242.00 in Ping An Insurance on September 2, 2024 and sell it today you would earn a total of 298.00 from holding Ping An Insurance or generate 123.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ping An Insurance vs. BJs Restaurants
Performance |
| Timeline |
| Ping An Insurance |
| BJs Restaurants |
Ping An and BJs Restaurants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ping An and BJs Restaurants
The main advantage of trading using opposite Ping An and BJs Restaurants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An 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.| Ping An vs. SIVERS SEMICONDUCTORS AB | Ping An vs. Darden Restaurants | Ping An vs. Reliance Steel Aluminum | Ping An vs. Q2M Managementberatung AG |
| BJs Restaurants vs. ELECTRONIC ARTS | BJs Restaurants vs. REVO INSURANCE SPA | BJs Restaurants vs. Japan Post Insurance | BJs Restaurants vs. Safety Insurance Group |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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