Correlation Between BJs Restaurants and CosmoSteel Holdings
Can any of the company-specific risk be diversified away by investing in both BJs Restaurants and CosmoSteel Holdings 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 CosmoSteel Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BJs Restaurants and CosmoSteel Holdings Limited, you can compare the effects of market volatilities on BJs Restaurants and CosmoSteel Holdings 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 CosmoSteel Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Restaurants and CosmoSteel Holdings.
Diversification Opportunities for BJs Restaurants and CosmoSteel Holdings
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between BJs and CosmoSteel is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and CosmoSteel Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CosmoSteel 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 CosmoSteel Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CosmoSteel Holdings has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and CosmoSteel Holdings go up and down completely randomly.
Pair Corralation between BJs Restaurants and CosmoSteel Holdings
Assuming the 90 days trading horizon BJs Restaurants is expected to generate 1.17 times more return on investment than CosmoSteel Holdings. However, BJs Restaurants is 1.17 times more volatile than CosmoSteel Holdings Limited. It trades about -0.03 of its potential returns per unit of risk. CosmoSteel Holdings Limited is currently generating about -0.14 per unit of risk. If you would invest 3,400 in BJs Restaurants on October 14, 2024 and sell it today you would lose (60.00) from holding BJs Restaurants or give up 1.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BJs Restaurants vs. CosmoSteel Holdings Limited
Performance |
| Timeline |
| BJs Restaurants |
| CosmoSteel Holdings |
BJs Restaurants and CosmoSteel Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Restaurants and CosmoSteel Holdings
The main advantage of trading using opposite BJs Restaurants and CosmoSteel Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Restaurants position performs unexpectedly, CosmoSteel Holdings 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 CosmoSteel Holdings will offset losses from the drop in CosmoSteel Holdings' long position.| BJs Restaurants vs. Genertec Universal Medical | BJs Restaurants vs. Zurich Insurance Group | BJs Restaurants vs. GLOBUS MEDICAL A | BJs Restaurants vs. Peijia Medical Limited |
| CosmoSteel Holdings vs. CarsalesCom | CosmoSteel Holdings vs. URBAN OUTFITTERS | CosmoSteel Holdings vs. Jacquet Metal Service | CosmoSteel Holdings vs. GEELY AUTOMOBILE |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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