Correlation Between BJs Restaurants and Corporate Office
Can any of the company-specific risk be diversified away by investing in both BJs Restaurants and Corporate Office 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 Corporate Office into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BJs Restaurants and Corporate Office Properties, you can compare the effects of market volatilities on BJs Restaurants and Corporate Office 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 Corporate Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Restaurants and Corporate Office.
Diversification Opportunities for BJs Restaurants and Corporate Office
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between BJs and Corporate is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and Corporate Office Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corporate Office Pro 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 Corporate Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corporate Office Pro has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and Corporate Office go up and down completely randomly.
Pair Corralation between BJs Restaurants and Corporate Office
Assuming the 90 days trading horizon BJs Restaurants is expected to generate 2.13 times more return on investment than Corporate Office. However, BJs Restaurants is 2.13 times more volatile than Corporate Office Properties. It trades about 0.09 of its potential returns per unit of risk. Corporate Office Properties is currently generating about 0.16 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 | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BJs Restaurants vs. Corporate Office Properties
Performance |
| Timeline |
| BJs Restaurants |
| Corporate Office Pro |
BJs Restaurants and Corporate Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Restaurants and Corporate Office
The main advantage of trading using opposite BJs Restaurants and Corporate Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Restaurants position performs unexpectedly, Corporate Office 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 Corporate Office will offset losses from the drop in Corporate Office'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 |
| Corporate Office vs. Clean Energy Fuels | Corporate Office vs. BJs Restaurants | Corporate Office vs. FRACTAL GAMING GROUP | Corporate Office vs. ANGLER GAMING PLC |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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