Correlation Between BJs Restaurants and WT OFFSHORE
Can any of the company-specific risk be diversified away by investing in both BJs Restaurants and WT OFFSHORE 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 WT OFFSHORE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BJs Restaurants and WT OFFSHORE, you can compare the effects of market volatilities on BJs Restaurants and WT OFFSHORE 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 WT OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Restaurants and WT OFFSHORE.
Diversification Opportunities for BJs Restaurants and WT OFFSHORE
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BJs and UWV is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and WT OFFSHORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WT OFFSHORE 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 WT OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WT OFFSHORE has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and WT OFFSHORE go up and down completely randomly.
Pair Corralation between BJs Restaurants and WT OFFSHORE
Assuming the 90 days trading horizon BJs Restaurants is expected to under-perform the WT OFFSHORE. But the stock apears to be less risky and, when comparing its historical volatility, BJs Restaurants is 1.9 times less risky than WT OFFSHORE. The stock trades about -0.07 of its potential returns per unit of risk. The WT OFFSHORE is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 158.00 in WT OFFSHORE on November 5, 2024 and sell it today you would lose (4.00) from holding WT OFFSHORE or give up 2.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BJs Restaurants vs. WT OFFSHORE
Performance |
| Timeline |
| BJs Restaurants |
| WT OFFSHORE |
BJs Restaurants and WT OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Restaurants and WT OFFSHORE
The main advantage of trading using opposite BJs Restaurants and WT OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Restaurants position performs unexpectedly, WT OFFSHORE 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 WT OFFSHORE will offset losses from the drop in WT OFFSHORE's long position.| BJs Restaurants vs. SIVERS SEMICONDUCTORS AB | BJs Restaurants vs. NorAm Drilling AS | BJs Restaurants vs. Volkswagen AG | BJs Restaurants vs. Darden Restaurants |
| WT OFFSHORE vs. Virtus Investment Partners | WT OFFSHORE vs. Guangdong Investment Limited | WT OFFSHORE vs. WisdomTree Investments | WT OFFSHORE vs. PennantPark Investment |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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