Correlation Between BJs Restaurants and SENKO GROUP
Can any of the company-specific risk be diversified away by investing in both BJs Restaurants and SENKO GROUP 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 SENKO GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BJs Restaurants and SENKO GROUP HOLDINGS, you can compare the effects of market volatilities on BJs Restaurants and SENKO GROUP 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 SENKO GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Restaurants and SENKO GROUP.
Diversification Opportunities for BJs Restaurants and SENKO GROUP
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BJs and SENKO is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and SENKO GROUP HOLDINGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SENKO GROUP HOLDINGS 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 SENKO GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SENKO GROUP HOLDINGS has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and SENKO GROUP go up and down completely randomly.
Pair Corralation between BJs Restaurants and SENKO GROUP
Assuming the 90 days trading horizon BJs Restaurants is expected to generate 1.13 times more return on investment than SENKO GROUP. However, BJs Restaurants is 1.13 times more volatile than SENKO GROUP HOLDINGS. It trades about -0.05 of its potential returns per unit of risk. SENKO GROUP HOLDINGS is currently generating about -0.22 per unit of risk. If you would invest 3,360 in BJs Restaurants on October 20, 2024 and sell it today you would lose (60.00) from holding BJs Restaurants or give up 1.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BJs Restaurants vs. SENKO GROUP HOLDINGS
Performance |
| Timeline |
| BJs Restaurants |
| SENKO GROUP HOLDINGS |
BJs Restaurants and SENKO GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Restaurants and SENKO GROUP
The main advantage of trading using opposite BJs Restaurants and SENKO GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Restaurants position performs unexpectedly, SENKO GROUP 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 SENKO GROUP will offset losses from the drop in SENKO GROUP's long position.| BJs Restaurants vs. EAGLE MATERIALS | BJs Restaurants vs. CNVISION MEDIA | BJs Restaurants vs. Vulcan Materials | BJs Restaurants vs. PT Global Mediacom |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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