Correlation Between BJs Restaurants and Greencoat
Can any of the company-specific risk be diversified away by investing in both BJs Restaurants and Greencoat 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 Greencoat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BJs Restaurants and Greencoat UK Wind, you can compare the effects of market volatilities on BJs Restaurants and Greencoat 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 Greencoat. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Restaurants and Greencoat.
Diversification Opportunities for BJs Restaurants and Greencoat
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BJs and Greencoat is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and Greencoat UK Wind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greencoat UK Wind 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 Greencoat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greencoat UK Wind has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and Greencoat go up and down completely randomly.
Pair Corralation between BJs Restaurants and Greencoat
Assuming the 90 days trading horizon BJs Restaurants is expected to generate 0.94 times more return on investment than Greencoat. However, BJs Restaurants is 1.06 times less risky than Greencoat. It trades about 0.03 of its potential returns per unit of risk. Greencoat UK Wind is currently generating about 0.02 per unit of risk. If you would invest 2,600 in BJs Restaurants on September 14, 2024 and sell it today you would earn a total of 820.00 from holding BJs Restaurants or generate 31.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
BJs Restaurants vs. Greencoat UK Wind
Performance |
| Timeline |
| BJs Restaurants |
| Greencoat UK Wind |
BJs Restaurants and Greencoat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Restaurants and Greencoat
The main advantage of trading using opposite BJs Restaurants and Greencoat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Restaurants position performs unexpectedly, Greencoat 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 Greencoat will offset losses from the drop in Greencoat's long position.| BJs Restaurants vs. GREENX METALS LTD | BJs Restaurants vs. North American Construction | BJs Restaurants vs. Dairy Farm International | BJs Restaurants vs. DISTRICT METALS |
| Greencoat vs. AAC TECHNOLOGHLDGADR | Greencoat vs. Zijin Mining Group | Greencoat vs. BJs Restaurants | Greencoat vs. SERI INDUSTRIAL EO |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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