Correlation Between STORE ELECTRONIC and BJs Wholesale
Can any of the company-specific risk be diversified away by investing in both STORE ELECTRONIC 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 STORE ELECTRONIC and BJs Wholesale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STORE ELECTRONIC and BJs Wholesale Club, you can compare the effects of market volatilities on STORE ELECTRONIC 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 STORE ELECTRONIC with a short position of BJs Wholesale. Check out your portfolio center. Please also check ongoing floating volatility patterns of STORE ELECTRONIC and BJs Wholesale.
Diversification Opportunities for STORE ELECTRONIC and BJs Wholesale
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between STORE and BJs is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding STORE ELECTRONIC 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 STORE ELECTRONIC 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 STORE ELECTRONIC 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 STORE ELECTRONIC i.e., STORE ELECTRONIC and BJs Wholesale go up and down completely randomly.
Pair Corralation between STORE ELECTRONIC and BJs Wholesale
Assuming the 90 days trading horizon STORE ELECTRONIC is expected to generate 5.12 times less return on investment than BJs Wholesale. In addition to that, STORE ELECTRONIC is 1.6 times more volatile than BJs Wholesale Club. It trades about 0.02 of its total potential returns per unit of risk. BJs Wholesale Club is currently generating about 0.2 per unit of volatility. If you would invest 9,350 in BJs Wholesale Club on November 29, 2024 and sell it today you would earn a total of 550.00 from holding BJs Wholesale Club or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
STORE ELECTRONIC vs. BJs Wholesale Club
Performance |
| Timeline |
| STORE ELECTRONIC |
| BJs Wholesale Club |
STORE ELECTRONIC and BJs Wholesale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STORE ELECTRONIC and BJs Wholesale
The main advantage of trading using opposite STORE ELECTRONIC and BJs Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STORE ELECTRONIC 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.| STORE ELECTRONIC vs. Tamburi Investment Partners | STORE ELECTRONIC vs. CDL INVESTMENT | STORE ELECTRONIC vs. MagnaChip Semiconductor Corp | STORE ELECTRONIC vs. TOREX SEMICONDUCTOR LTD |
| BJs Wholesale vs. PennyMac Mortgage Investment | BJs Wholesale vs. New Residential Investment | BJs Wholesale vs. Merit Medical Systems | BJs Wholesale vs. Investment AB Latour |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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