Correlation Between United Airlines and BJs Restaurants
Can any of the company-specific risk be diversified away by investing in both United Airlines 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 United Airlines and BJs Restaurants into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Airlines Holdings and BJs Restaurants, you can compare the effects of market volatilities on United Airlines 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 United Airlines with a short position of BJs Restaurants. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Airlines and BJs Restaurants.
Diversification Opportunities for United Airlines and BJs Restaurants
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between United and BJs is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding United Airlines Holdings and BJs Restaurants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BJs Restaurants and United Airlines 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 United Airlines Holdings 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 United Airlines i.e., United Airlines and BJs Restaurants go up and down completely randomly.
Pair Corralation between United Airlines and BJs Restaurants
Assuming the 90 days trading horizon United Airlines Holdings is expected to generate 1.18 times more return on investment than BJs Restaurants. However, United Airlines is 1.18 times more volatile than BJs Restaurants. It trades about 0.35 of its potential returns per unit of risk. BJs Restaurants is currently generating about 0.23 per unit of risk. If you would invest 7,177 in United Airlines Holdings on September 2, 2024 and sell it today you would earn a total of 1,965 from holding United Airlines Holdings or generate 27.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Airlines Holdings vs. BJs Restaurants
Performance |
| Timeline |
| United Airlines Holdings |
| BJs Restaurants |
United Airlines and BJs Restaurants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Airlines and BJs Restaurants
The main advantage of trading using opposite United Airlines and BJs Restaurants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Airlines 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.| United Airlines vs. Superior Plus Corp | United Airlines vs. NMI Holdings | United Airlines vs. Origin Agritech | United Airlines vs. SIVERS SEMICONDUCTORS AB |
| 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |