Correlation Between BJs Restaurants and 744448CW9

Can any of the company-specific risk be diversified away by investing in both BJs Restaurants and 744448CW9 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 744448CW9 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BJs Restaurants and XEL 41 01 JUN 32, you can compare the effects of market volatilities on BJs Restaurants and 744448CW9 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 744448CW9. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Restaurants and 744448CW9.

Diversification Opportunities for BJs Restaurants and 744448CW9

-0.28

Correlation Coefficient

BJs Restaurants  744448CW9

Very good diversification

The 3 months correlation between BJs and 744448CW9 is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and XEL 41 01 JUN 32 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XEL 41 01 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 744448CW9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XEL 41 01 has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and 744448CW9 go up and down completely randomly.

Pair Corralation between BJs Restaurants and 744448CW9

Given the investment horizon of 90 days BJs Restaurants is expected to generate 3.4 times more return on investment than 744448CW9. However, BJs Restaurants is 3.4 times more volatile than XEL 41 01 JUN 32. It trades about 0.17 of its potential returns per unit of risk. XEL 41 01 JUN 32 is currently generating about -0.06 per unit of risk. If you would invest  2,982  in BJs Restaurants on September 2, 2024 and sell it today you would earn a total of  862.00  from holding BJs Restaurants or generate 28.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	70.31%
Values	Daily Returns

BJs Restaurants  vs.  XEL 41 01 JUN 32

BJs Restaurants

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BJs Restaurants are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, BJs Restaurants demonstrated solid returns over the last few months and may actually be approaching a breakup point.

XEL 41 01

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days XEL 41 01 JUN 32 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 744448CW9 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with BJs Restaurants and 744448CW9

The main advantage of trading using opposite BJs Restaurants and 744448CW9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Restaurants position performs unexpectedly, 744448CW9 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 744448CW9 will offset losses from the drop in 744448CW9's long position.

The idea behind BJs Restaurants and XEL 41 01 JUN 32 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.