Correlation Between Pan Pacific and BJs Wholesale
Can any of the company-specific risk be diversified away by investing in both Pan Pacific 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 Pan Pacific and BJs Wholesale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pan Pacific International and BJs Wholesale Club, you can compare the effects of market volatilities on Pan Pacific 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 Pan Pacific with a short position of BJs Wholesale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pan Pacific and BJs Wholesale.
Diversification Opportunities for Pan Pacific and BJs Wholesale
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pan and BJs is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Pan Pacific International 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 Pan Pacific 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 Pan Pacific International 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 Pan Pacific i.e., Pan Pacific and BJs Wholesale go up and down completely randomly.
Pair Corralation between Pan Pacific and BJs Wholesale
Assuming the 90 days horizon Pan Pacific International is expected to generate 1.55 times more return on investment than BJs Wholesale. However, Pan Pacific is 1.55 times more volatile than BJs Wholesale Club. It trades about 0.08 of its potential returns per unit of risk. BJs Wholesale Club is currently generating about 0.08 per unit of risk. If you would invest 1,234 in Pan Pacific International on August 31, 2024 and sell it today you would earn a total of 1,066 from holding Pan Pacific International or generate 86.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
Pan Pacific International vs. BJs Wholesale Club
Performance |
| Timeline |
| Pan Pacific International |
| BJs Wholesale Club |
Pan Pacific and BJs Wholesale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pan Pacific and BJs Wholesale
The main advantage of trading using opposite Pan Pacific and BJs Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pan Pacific 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.| Pan Pacific vs. PT Indofood Sukses | Pan Pacific vs. TYSON FOODS A | Pan Pacific vs. INDOFOOD AGRI RES | Pan Pacific vs. Performance Food Group |
| BJs Wholesale vs. COPLAND ROAD CAPITAL | BJs Wholesale vs. Natural Health Trends | BJs Wholesale vs. EVS Broadcast Equipment | BJs Wholesale vs. EPSILON HEALTHCARE LTD |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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