Correlation Between BJs Restaurants and KIMBALL ELECTRONICS
Can any of the company-specific risk be diversified away by investing in both BJs Restaurants and KIMBALL ELECTRONICS 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 BJs Restaurants and KIMBALL ELECTRONICS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BJs Restaurants and KIMBALL ELECTRONICS, you can compare the effects of market volatilities on BJs Restaurants and KIMBALL ELECTRONICS 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 BJs Restaurants with a short position of KIMBALL ELECTRONICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Restaurants and KIMBALL ELECTRONICS.
Diversification Opportunities for BJs Restaurants and KIMBALL ELECTRONICS
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BJs and KIMBALL is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and KIMBALL ELECTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KIMBALL ELECTRONICS and BJs Restaurants 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 BJs Restaurants are associated (or correlated) with KIMBALL ELECTRONICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KIMBALL ELECTRONICS has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and KIMBALL ELECTRONICS go up and down completely randomly.
Pair Corralation between BJs Restaurants and KIMBALL ELECTRONICS
Assuming the 90 days trading horizon BJs Restaurants is expected to generate 1.08 times more return on investment than KIMBALL ELECTRONICS. However, BJs Restaurants is 1.08 times more volatile than KIMBALL ELECTRONICS. It trades about 0.04 of its potential returns per unit of risk. KIMBALL ELECTRONICS is currently generating about -0.03 per unit of risk. If you would invest 2,960 in BJs Restaurants on September 4, 2024 and sell it today you would earn a total of 600.00 from holding BJs Restaurants or generate 20.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BJs Restaurants vs. KIMBALL ELECTRONICS
Performance |
| Timeline |
| BJs Restaurants |
| KIMBALL ELECTRONICS |
BJs Restaurants and KIMBALL ELECTRONICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Restaurants and KIMBALL ELECTRONICS
The main advantage of trading using opposite BJs Restaurants and KIMBALL ELECTRONICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Restaurants position performs unexpectedly, KIMBALL ELECTRONICS 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 KIMBALL ELECTRONICS will offset losses from the drop in KIMBALL ELECTRONICS's long position.| BJs Restaurants vs. Apple Inc | BJs Restaurants vs. Apple Inc | BJs Restaurants vs. Apple Inc | BJs Restaurants vs. Apple Inc |
| KIMBALL ELECTRONICS vs. Delta Electronics Public | KIMBALL ELECTRONICS vs. YASKAWA ELEC UNSP | KIMBALL ELECTRONICS vs. VERTIV HOLCL A |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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