Correlation Between BJs Restaurants and FuelCell Energy
Can any of the company-specific risk be diversified away by investing in both BJs Restaurants and FuelCell Energy 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 FuelCell Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BJs Restaurants and FuelCell Energy, you can compare the effects of market volatilities on BJs Restaurants and FuelCell Energy 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 FuelCell Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Restaurants and FuelCell Energy.
Diversification Opportunities for BJs Restaurants and FuelCell Energy
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between BJs and FuelCell is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and FuelCell Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FuelCell Energy 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 FuelCell Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FuelCell Energy has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and FuelCell Energy go up and down completely randomly.
Pair Corralation between BJs Restaurants and FuelCell Energy
Assuming the 90 days trading horizon BJs Restaurants is expected to under-perform the FuelCell Energy. But the stock apears to be less risky and, when comparing its historical volatility, BJs Restaurants is 3.93 times less risky than FuelCell Energy. The stock trades about -0.12 of its potential returns per unit of risk. The FuelCell Energy is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,036 in FuelCell Energy on October 16, 2024 and sell it today you would earn a total of 94.00 from holding FuelCell Energy or generate 9.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 88.24% |
| Values | Daily Returns |
BJs Restaurants vs. FuelCell Energy
Performance |
| Timeline |
| BJs Restaurants |
| FuelCell Energy |
BJs Restaurants and FuelCell Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Restaurants and FuelCell Energy
The main advantage of trading using opposite BJs Restaurants and FuelCell Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Restaurants position performs unexpectedly, FuelCell Energy 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 FuelCell Energy will offset losses from the drop in FuelCell Energy's long position.| BJs Restaurants vs. Lamar Advertising | BJs Restaurants vs. GEELY AUTOMOBILE | BJs Restaurants vs. ecotel communication ag | BJs Restaurants vs. MOBILE FACTORY INC |
| FuelCell Energy vs. China BlueChemical | FuelCell Energy vs. COMBA TELECOM SYST | FuelCell Energy vs. Mitsui Chemicals | FuelCell Energy vs. Telecom Argentina SA |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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