Correlation Between BJs Restaurants and ALGOMA STEEL
Can any of the company-specific risk be diversified away by investing in both BJs Restaurants and ALGOMA STEEL 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 ALGOMA STEEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BJs Restaurants and ALGOMA STEEL GROUP, you can compare the effects of market volatilities on BJs Restaurants and ALGOMA STEEL 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 ALGOMA STEEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Restaurants and ALGOMA STEEL.
Diversification Opportunities for BJs Restaurants and ALGOMA STEEL
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BJs and ALGOMA is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and ALGOMA STEEL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALGOMA STEEL GROUP 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 ALGOMA STEEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALGOMA STEEL GROUP has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and ALGOMA STEEL go up and down completely randomly.
Pair Corralation between BJs Restaurants and ALGOMA STEEL
Assuming the 90 days trading horizon BJs Restaurants is expected to generate 1.74 times less return on investment than ALGOMA STEEL. In addition to that, BJs Restaurants is 1.09 times more volatile than ALGOMA STEEL GROUP. It trades about 0.03 of its total potential returns per unit of risk. ALGOMA STEEL GROUP is currently generating about 0.06 per unit of volatility. If you would invest 545.00 in ALGOMA STEEL GROUP on September 3, 2024 and sell it today you would earn a total of 455.00 from holding ALGOMA STEEL GROUP or generate 83.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BJs Restaurants vs. ALGOMA STEEL GROUP
Performance |
| Timeline |
| BJs Restaurants |
| ALGOMA STEEL GROUP |
BJs Restaurants and ALGOMA STEEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Restaurants and ALGOMA STEEL
The main advantage of trading using opposite BJs Restaurants and ALGOMA STEEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Restaurants position performs unexpectedly, ALGOMA STEEL 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 ALGOMA STEEL will offset losses from the drop in ALGOMA STEEL's long position.| BJs Restaurants vs. Apollo Investment Corp | BJs Restaurants vs. REINET INVESTMENTS SCA | BJs Restaurants vs. ECHO INVESTMENT ZY | BJs Restaurants vs. MGIC INVESTMENT |
| ALGOMA STEEL vs. ArcelorMittal | ALGOMA STEEL vs. Steel Dynamics | ALGOMA STEEL vs. NIPPON STEEL SPADR | ALGOMA STEEL vs. POSCO Holdings |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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