Correlation Between BJs Restaurants and Safety Insurance
Can any of the company-specific risk be diversified away by investing in both BJs Restaurants and Safety Insurance 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 Safety Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BJs Restaurants and Safety Insurance Group, you can compare the effects of market volatilities on BJs Restaurants and Safety Insurance 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 Safety Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Restaurants and Safety Insurance.
Diversification Opportunities for BJs Restaurants and Safety Insurance
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BJs and Safety is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and Safety Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safety Insurance 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 Safety Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safety Insurance has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and Safety Insurance go up and down completely randomly.
Pair Corralation between BJs Restaurants and Safety Insurance
Assuming the 90 days trading horizon BJs Restaurants is expected to generate 2.48 times less return on investment than Safety Insurance. In addition to that, BJs Restaurants is 1.87 times more volatile than Safety Insurance Group. It trades about 0.07 of its total potential returns per unit of risk. Safety Insurance Group is currently generating about 0.33 per unit of volatility. If you would invest 7,200 in Safety Insurance Group on August 31, 2024 and sell it today you would earn a total of 950.00 from holding Safety Insurance Group or generate 13.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BJs Restaurants vs. Safety Insurance Group
Performance |
| Timeline |
| BJs Restaurants |
| Safety Insurance |
BJs Restaurants and Safety Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Restaurants and Safety Insurance
The main advantage of trading using opposite BJs Restaurants and Safety Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Restaurants position performs unexpectedly, Safety Insurance 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 Safety Insurance will offset losses from the drop in Safety Insurance's long position.| BJs Restaurants vs. Kaiser Aluminum | BJs Restaurants vs. Infrastrutture Wireless Italiane | BJs Restaurants vs. AAC TECHNOLOGHLDGADR | BJs Restaurants vs. SIMS METAL MGT |
| Safety Insurance vs. Chuangs China Investments | Safety Insurance vs. UNIVERSAL MUSIC GROUP | Safety Insurance vs. Gladstone Investment | Safety Insurance vs. BURLINGTON STORES |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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