Correlation Between STORE ELECTRONIC and BJs Restaurants
Can any of the company-specific risk be diversified away by investing in both STORE ELECTRONIC 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 STORE ELECTRONIC and BJs Restaurants 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 Restaurants, you can compare the effects of market volatilities on STORE ELECTRONIC 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 STORE ELECTRONIC with a short position of BJs Restaurants. Check out your portfolio center. Please also check ongoing floating volatility patterns of STORE ELECTRONIC and BJs Restaurants.
Diversification Opportunities for STORE ELECTRONIC and BJs Restaurants
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between STORE and BJs is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding STORE ELECTRONIC and BJs Restaurants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BJs Restaurants 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 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 STORE ELECTRONIC i.e., STORE ELECTRONIC and BJs Restaurants go up and down completely randomly.
Pair Corralation between STORE ELECTRONIC and BJs Restaurants
Assuming the 90 days trading horizon STORE ELECTRONIC is expected to generate 1.25 times more return on investment than BJs Restaurants. However, STORE ELECTRONIC is 1.25 times more volatile than BJs Restaurants. It trades about 0.12 of its potential returns per unit of risk. BJs Restaurants is currently generating about 0.1 per unit of risk. If you would invest 13,730 in STORE ELECTRONIC on December 4, 2024 and sell it today you would earn a total of 6,690 from holding STORE ELECTRONIC or generate 48.73% 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 Restaurants
Performance |
Timeline |
STORE ELECTRONIC |
BJs Restaurants |
STORE ELECTRONIC and BJs Restaurants Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with STORE ELECTRONIC and BJs Restaurants
The main advantage of trading using opposite STORE ELECTRONIC and BJs Restaurants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STORE ELECTRONIC 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.STORE ELECTRONIC vs. US Foods Holding | STORE ELECTRONIC vs. Moneysupermarket Group PLC | STORE ELECTRONIC vs. IMPERIAL TOBACCO | STORE ELECTRONIC vs. Collins Foods Limited |
BJs Restaurants vs. Chiba Bank | BJs Restaurants vs. Cleanaway Waste Management | BJs Restaurants vs. CHIBA BANK | BJs Restaurants vs. Commonwealth Bank of |
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.
Other Complementary Tools
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |