Correlation Between BJs Restaurants and KION Group
Can any of the company-specific risk be diversified away by investing in both BJs Restaurants and KION Group 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 KION Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BJs Restaurants and KION Group AG, you can compare the effects of market volatilities on BJs Restaurants and KION Group 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 KION Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Restaurants and KION Group.
Diversification Opportunities for BJs Restaurants and KION Group
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BJs and KION is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and KION Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KION Group AG 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 KION Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KION Group AG has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and KION Group go up and down completely randomly.
Pair Corralation between BJs Restaurants and KION Group
Assuming the 90 days trading horizon BJs Restaurants is expected to under-perform the KION Group. But the stock apears to be less risky and, when comparing its historical volatility, BJs Restaurants is 1.6 times less risky than KION Group. The stock trades about -0.05 of its potential returns per unit of risk. The KION Group AG is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 3,102 in KION Group AG on October 20, 2024 and sell it today you would earn a total of 281.00 from holding KION Group AG or generate 9.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BJs Restaurants vs. KION Group AG
Performance |
| Timeline |
| BJs Restaurants |
| KION Group AG |
BJs Restaurants and KION Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Restaurants and KION Group
The main advantage of trading using opposite BJs Restaurants and KION Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Restaurants position performs unexpectedly, KION Group 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 KION Group will offset losses from the drop in KION Group's long position.| BJs Restaurants vs. EAGLE MATERIALS | BJs Restaurants vs. CNVISION MEDIA | BJs Restaurants vs. Vulcan Materials | BJs Restaurants vs. PT Global Mediacom |
| KION Group vs. AB Volvo | KION Group vs. PACCAR Inc | KION Group vs. Sinotruk Limited | KION Group vs. Wabash National |
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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