Correlation Between BJs Restaurants and DALATA HOTEL
Can any of the company-specific risk be diversified away by investing in both BJs Restaurants and DALATA HOTEL 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 DALATA HOTEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BJs Restaurants and DALATA HOTEL, you can compare the effects of market volatilities on BJs Restaurants and DALATA HOTEL 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 DALATA HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Restaurants and DALATA HOTEL.
Diversification Opportunities for BJs Restaurants and DALATA HOTEL
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BJs and DALATA is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and DALATA HOTEL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DALATA HOTEL 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 DALATA HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DALATA HOTEL has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and DALATA HOTEL go up and down completely randomly.
Pair Corralation between BJs Restaurants and DALATA HOTEL
Assuming the 90 days trading horizon BJs Restaurants is expected to under-perform the DALATA HOTEL. But the stock apears to be less risky and, when comparing its historical volatility, BJs Restaurants is 1.04 times less risky than DALATA HOTEL. The stock trades about -0.04 of its potential returns per unit of risk. The DALATA HOTEL is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 417.00 in DALATA HOTEL on October 30, 2024 and sell it today you would earn a total of 19.00 from holding DALATA HOTEL or generate 4.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BJs Restaurants vs. DALATA HOTEL
Performance |
| Timeline |
| BJs Restaurants |
| DALATA HOTEL |
BJs Restaurants and DALATA HOTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Restaurants and DALATA HOTEL
The main advantage of trading using opposite BJs Restaurants and DALATA HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Restaurants position performs unexpectedly, DALATA HOTEL 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 DALATA HOTEL will offset losses from the drop in DALATA HOTEL's long position.| BJs Restaurants vs. Warner Music Group | BJs Restaurants vs. INSURANCE AUST GRP | BJs Restaurants vs. INTERSHOP Communications Aktiengesellschaft | BJs Restaurants vs. Goosehead Insurance |
| DALATA HOTEL vs. PRECISION DRILLING P | DALATA HOTEL vs. Stag Industrial | DALATA HOTEL vs. BORR DRILLING NEW | DALATA HOTEL vs. ULTRA CLEAN HLDGS |
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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