Correlation Between BJs Restaurants and ASPEN TECHINC
Can any of the company-specific risk be diversified away by investing in both BJs Restaurants and ASPEN TECHINC 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 ASPEN TECHINC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BJs Restaurants and ASPEN TECHINC DL, you can compare the effects of market volatilities on BJs Restaurants and ASPEN TECHINC 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 ASPEN TECHINC. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Restaurants and ASPEN TECHINC.
Diversification Opportunities for BJs Restaurants and ASPEN TECHINC
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BJs and ASPEN is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and ASPEN TECHINC DL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASPEN TECHINC DL 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 ASPEN TECHINC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASPEN TECHINC DL has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and ASPEN TECHINC go up and down completely randomly.
Pair Corralation between BJs Restaurants and ASPEN TECHINC
Assuming the 90 days trading horizon BJs Restaurants is expected to under-perform the ASPEN TECHINC. In addition to that, BJs Restaurants is 4.27 times more volatile than ASPEN TECHINC DL. It trades about -0.03 of its total potential returns per unit of risk. ASPEN TECHINC DL is currently generating about 0.28 per unit of volatility. If you would invest 23,600 in ASPEN TECHINC DL on October 14, 2024 and sell it today you would earn a total of 600.00 from holding ASPEN TECHINC DL or generate 2.54% 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. ASPEN TECHINC DL
Performance |
| Timeline |
| BJs Restaurants |
| ASPEN TECHINC DL |
BJs Restaurants and ASPEN TECHINC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Restaurants and ASPEN TECHINC
The main advantage of trading using opposite BJs Restaurants and ASPEN TECHINC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Restaurants position performs unexpectedly, ASPEN TECHINC 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 ASPEN TECHINC will offset losses from the drop in ASPEN TECHINC's long position.| BJs Restaurants vs. FAST RETAIL ADR | BJs Restaurants vs. Australian Agricultural | BJs Restaurants vs. MARKET VECTR RETAIL | BJs Restaurants vs. National Retail Properties |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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