Correlation Between Willamette Valley and BJs Restaurants
Can any of the company-specific risk be diversified away by investing in both Willamette Valley 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 Willamette Valley and BJs Restaurants into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Willamette Valley Vineyards and BJs Restaurants, you can compare the effects of market volatilities on Willamette Valley 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 Willamette Valley with a short position of BJs Restaurants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Willamette Valley and BJs Restaurants.
Diversification Opportunities for Willamette Valley and BJs Restaurants
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Willamette and BJs is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Willamette Valley Vineyards and BJs Restaurants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BJs Restaurants and Willamette Valley 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 Willamette Valley Vineyards 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 Willamette Valley i.e., Willamette Valley and BJs Restaurants go up and down completely randomly.
Pair Corralation between Willamette Valley and BJs Restaurants
Given the investment horizon of 90 days Willamette Valley Vineyards is expected to under-perform the BJs Restaurants. But the stock apears to be less risky and, when comparing its historical volatility, Willamette Valley Vineyards is 2.8 times less risky than BJs Restaurants. The stock trades about -0.2 of its potential returns per unit of risk. The BJs Restaurants is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3,744 in BJs Restaurants on August 31, 2024 and sell it today you would earn a total of 40.00 from holding BJs Restaurants or generate 1.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Willamette Valley Vineyards vs. BJs Restaurants
Performance |
| Timeline |
| Willamette Valley |
| BJs Restaurants |
Willamette Valley and BJs Restaurants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Willamette Valley and BJs Restaurants
The main advantage of trading using opposite Willamette Valley and BJs Restaurants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Willamette Valley 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.| Willamette Valley vs. Naked Wines plc | Willamette Valley vs. Andrew Peller Limited | Willamette Valley vs. Iconic Brands | Willamette Valley vs. Naked Wines plc |
| 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |