Correlation Between BJs Restaurants and Fukuyama Transporting
Can any of the company-specific risk be diversified away by investing in both BJs Restaurants and Fukuyama Transporting 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 Fukuyama Transporting into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BJs Restaurants and Fukuyama Transporting Co, you can compare the effects of market volatilities on BJs Restaurants and Fukuyama Transporting 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 Fukuyama Transporting. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Restaurants and Fukuyama Transporting.
Diversification Opportunities for BJs Restaurants and Fukuyama Transporting
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BJs and Fukuyama is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and Fukuyama Transporting Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fukuyama Transporting 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 Fukuyama Transporting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fukuyama Transporting has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and Fukuyama Transporting go up and down completely randomly.
Pair Corralation between BJs Restaurants and Fukuyama Transporting
Assuming the 90 days trading horizon BJs Restaurants is expected to generate 1.54 times less return on investment than Fukuyama Transporting. In addition to that, BJs Restaurants is 1.22 times more volatile than Fukuyama Transporting Co. It trades about 0.01 of its total potential returns per unit of risk. Fukuyama Transporting Co is currently generating about 0.03 per unit of volatility. If you would invest 1,952 in Fukuyama Transporting Co on August 25, 2024 and sell it today you would earn a total of 168.00 from holding Fukuyama Transporting Co or generate 8.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BJs Restaurants vs. Fukuyama Transporting Co
Performance |
| Timeline |
| BJs Restaurants |
| Fukuyama Transporting |
BJs Restaurants and Fukuyama Transporting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Restaurants and Fukuyama Transporting
The main advantage of trading using opposite BJs Restaurants and Fukuyama Transporting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Restaurants position performs unexpectedly, Fukuyama Transporting 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 Fukuyama Transporting will offset losses from the drop in Fukuyama Transporting's long position.| BJs Restaurants vs. Gladstone Investment | BJs Restaurants vs. Strategic Investments AS | BJs Restaurants vs. CDN IMPERIAL BANK | BJs Restaurants vs. HK Electric Investments |
| Fukuyama Transporting vs. Heartland Express | Fukuyama Transporting vs. Superior Plus Corp | Fukuyama Transporting vs. NMI Holdings | Fukuyama Transporting vs. Origin Agritech |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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