Correlation Between High Performance and BJs Restaurants
Can any of the company-specific risk be diversified away by investing in both High Performance 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 High Performance and BJs Restaurants into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between High Performance Beverages and BJs Restaurants, you can compare the effects of market volatilities on High Performance 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 High Performance with a short position of BJs Restaurants. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Performance and BJs Restaurants.
Diversification Opportunities for High Performance and BJs Restaurants
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between High and BJs is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding High Performance Beverages and BJs Restaurants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BJs Restaurants and High Performance 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 High Performance Beverages 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 High Performance i.e., High Performance and BJs Restaurants go up and down completely randomly.
Pair Corralation between High Performance and BJs Restaurants
Given the investment horizon of 90 days High Performance Beverages is expected to generate 130.44 times more return on investment than BJs Restaurants. However, High Performance is 130.44 times more volatile than BJs Restaurants. It trades about 0.34 of its potential returns per unit of risk. BJs Restaurants is currently generating about 0.03 per unit of risk. If you would invest 0.01 in High Performance Beverages on September 19, 2024 and sell it today you would lose (0.01) from holding High Performance Beverages or give up 100.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
High Performance Beverages vs. BJs Restaurants
Performance |
| Timeline |
| High Performance Bev |
| BJs Restaurants |
High Performance and BJs Restaurants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with High Performance and BJs Restaurants
The main advantage of trading using opposite High Performance and BJs Restaurants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High Performance 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.| High Performance vs. V Group | High Performance vs. Fbec Worldwide | High Performance vs. Hiru Corporation | High Performance vs. Alkame Holdings |
| BJs Restaurants vs. Dine Brands Global | BJs Restaurants vs. Brinker International | BJs Restaurants vs. Bloomin Brands | BJs Restaurants vs. The Cheesecake Factory |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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