Correlation Between BJs Restaurants and KKR Co
Can any of the company-specific risk be diversified away by investing in both BJs Restaurants and KKR Co 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 KKR Co into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BJs Restaurants and KKR Co LP, you can compare the effects of market volatilities on BJs Restaurants and KKR Co 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 KKR Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Restaurants and KKR Co.
Diversification Opportunities for BJs Restaurants and KKR Co
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between BJs and KKR is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and KKR Co LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KKR Co LP 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 KKR Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KKR Co LP has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and KKR Co go up and down completely randomly.
Pair Corralation between BJs Restaurants and KKR Co
Assuming the 90 days trading horizon BJs Restaurants is expected to generate 8.63 times less return on investment than KKR Co. In addition to that, BJs Restaurants is 1.28 times more volatile than KKR Co LP. It trades about 0.01 of its total potential returns per unit of risk. KKR Co LP is currently generating about 0.15 per unit of volatility. If you would invest 7,409 in KKR Co LP on August 25, 2024 and sell it today you would earn a total of 7,819 from holding KKR Co LP or generate 105.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BJs Restaurants vs. KKR Co LP
Performance |
| Timeline |
| BJs Restaurants |
| KKR Co LP |
BJs Restaurants and KKR Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Restaurants and KKR Co
The main advantage of trading using opposite BJs Restaurants and KKR Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Restaurants position performs unexpectedly, KKR Co 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 KKR Co will offset losses from the drop in KKR Co'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 |
| KKR Co vs. BJs Restaurants | KKR Co vs. UNIVMUSIC GRPADR050 | KKR Co vs. Materialise NV | KKR Co vs. VULCAN MATERIALS |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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