Correlation Between BJs Restaurants and Reinsurance Group
Can any of the company-specific risk be diversified away by investing in both BJs Restaurants and Reinsurance 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 Reinsurance 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 Reinsurance Group of, you can compare the effects of market volatilities on BJs Restaurants and Reinsurance 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 Reinsurance Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Restaurants and Reinsurance Group.
Diversification Opportunities for BJs Restaurants and Reinsurance Group
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BJs and Reinsurance is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and Reinsurance Group of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reinsurance Group 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 Reinsurance Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reinsurance Group has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and Reinsurance Group go up and down completely randomly.
Pair Corralation between BJs Restaurants and Reinsurance Group
Assuming the 90 days trading horizon BJs Restaurants is expected to generate 1.02 times less return on investment than Reinsurance Group. In addition to that, BJs Restaurants is 1.42 times more volatile than Reinsurance Group of. It trades about 0.04 of its total potential returns per unit of risk. Reinsurance Group of is currently generating about 0.06 per unit of volatility. If you would invest 18,728 in Reinsurance Group of on September 2, 2024 and sell it today you would earn a total of 2,872 from holding Reinsurance Group of or generate 15.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BJs Restaurants vs. Reinsurance Group of
Performance |
| Timeline |
| BJs Restaurants |
| Reinsurance Group |
BJs Restaurants and Reinsurance Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Restaurants and Reinsurance Group
The main advantage of trading using opposite BJs Restaurants and Reinsurance Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Restaurants position performs unexpectedly, Reinsurance 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 Reinsurance Group will offset losses from the drop in Reinsurance Group's long position.| BJs Restaurants vs. ELECTRONIC ARTS | BJs Restaurants vs. REVO INSURANCE SPA | BJs Restaurants vs. Japan Post Insurance | BJs Restaurants vs. Safety Insurance Group |
| Reinsurance Group vs. Superior Plus Corp | Reinsurance Group vs. Origin Agritech | Reinsurance Group vs. Identiv | Reinsurance Group vs. INTUITIVE SURGICAL |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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