Correlation Between BJs Restaurants and Transport International
Can any of the company-specific risk be diversified away by investing in both BJs Restaurants and Transport International 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 Transport International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BJs Restaurants and Transport International Holdings, you can compare the effects of market volatilities on BJs Restaurants and Transport International 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 Transport International. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Restaurants and Transport International.
Diversification Opportunities for BJs Restaurants and Transport International
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BJs and Transport is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and Transport International Holdin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transport International 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 Transport International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transport International has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and Transport International go up and down completely randomly.
Pair Corralation between BJs Restaurants and Transport International
Assuming the 90 days trading horizon BJs Restaurants is expected to generate 1.34 times more return on investment than Transport International. However, BJs Restaurants is 1.34 times more volatile than Transport International Holdings. It trades about 0.09 of its potential returns per unit of risk. Transport International Holdings is currently generating about 0.03 per unit of risk. If you would invest 3,400 in BJs Restaurants on September 1, 2024 and sell it today you would earn a total of 180.00 from holding BJs Restaurants or generate 5.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BJs Restaurants vs. Transport International Holdin
Performance |
| Timeline |
| BJs Restaurants |
| Transport International |
BJs Restaurants and Transport International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Restaurants and Transport International
The main advantage of trading using opposite BJs Restaurants and Transport International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Restaurants position performs unexpectedly, Transport International 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 Transport International will offset losses from the drop in Transport International's long position.| BJs Restaurants vs. HEMISPHERE EGY | BJs Restaurants vs. KRISPY KREME DL 01 | BJs Restaurants vs. ADRIATIC METALS LS 013355 | BJs Restaurants vs. Cogent Communications Holdings |
| Transport International vs. Martin Marietta Materials | Transport International vs. Applied Materials | Transport International vs. Materialise NV | Transport International vs. THRACE PLASTICS |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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