Correlation Between BJs Wholesale and Maison Solutions

Can any of the company-specific risk be diversified away by investing in both BJs Wholesale and Maison Solutions 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 Wholesale and Maison Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BJs Wholesale Club and Maison Solutions, you can compare the effects of market volatilities on BJs Wholesale and Maison Solutions 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 Wholesale with a short position of Maison Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Wholesale and Maison Solutions.

Diversification Opportunities for BJs Wholesale and Maison Solutions

-0.38

Correlation Coefficient

BJs Wholesale  Maison Solutions

Very good diversification

The 3 months correlation between BJs and Maison is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding BJs Wholesale Club and Maison Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maison Solutions and BJs Wholesale 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 Wholesale Club are associated (or correlated) with Maison Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maison Solutions has no effect on the direction of BJs Wholesale i.e., BJs Wholesale and Maison Solutions go up and down completely randomly.

Pair Corralation between BJs Wholesale and Maison Solutions

Allowing for the 90-day total investment horizon BJs Wholesale Club is expected to under-perform the Maison Solutions. But the stock apears to be less risky and, when comparing its historical volatility, BJs Wholesale Club is 4.83 times less risky than Maison Solutions. The stock trades about -0.13 of its potential returns per unit of risk. The Maison Solutions is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  96.00  in Maison Solutions on September 27, 2024 and sell it today you would earn a total of  15.00  from holding Maison Solutions or generate 15.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

BJs Wholesale Club  vs.  Maison Solutions

BJs Wholesale Club

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BJs Wholesale Club are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile forward-looking indicators, BJs Wholesale revealed solid returns over the last few months and may actually be approaching a breakup point.

Maison Solutions

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Maison Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with BJs Wholesale and Maison Solutions

The main advantage of trading using opposite BJs Wholesale and Maison Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Wholesale position performs unexpectedly, Maison Solutions 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 Maison Solutions will offset losses from the drop in Maison Solutions' long position.

The idea behind BJs Wholesale Club and Maison Solutions pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.