Correlation Between BJs Wholesale and MONGOLIAN MINING

Can any of the company-specific risk be diversified away by investing in both BJs Wholesale and MONGOLIAN MINING 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 MONGOLIAN MINING 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 MONGOLIAN MINING CRPREGS, you can compare the effects of market volatilities on BJs Wholesale and MONGOLIAN MINING 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 MONGOLIAN MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Wholesale and MONGOLIAN MINING.

Diversification Opportunities for BJs Wholesale and MONGOLIAN MINING

-0.25

Correlation Coefficient

BJs Wholesale  MONGOLIAN MINING

Very good diversification

The 3 months correlation between BJs and MONGOLIAN is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding BJs Wholesale Club and MONGOLIAN MINING CRPREGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MONGOLIAN MINING CRPREGS 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 MONGOLIAN MINING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MONGOLIAN MINING CRPREGS has no effect on the direction of BJs Wholesale i.e., BJs Wholesale and MONGOLIAN MINING go up and down completely randomly.

Pair Corralation between BJs Wholesale and MONGOLIAN MINING

Assuming the 90 days horizon BJs Wholesale Club is expected to generate 0.51 times more return on investment than MONGOLIAN MINING. However, BJs Wholesale Club is 1.98 times less risky than MONGOLIAN MINING. It trades about -0.17 of its potential returns per unit of risk. MONGOLIAN MINING CRPREGS is currently generating about -0.29 per unit of risk. If you would invest  9,100  in BJs Wholesale Club on October 5, 2024 and sell it today you would lose (300.00) from holding BJs Wholesale Club or give up 3.3% of portfolio value over 90 days.

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

BJs Wholesale Club  vs.  MONGOLIAN MINING CRPREGS

BJs Wholesale Club

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days BJs Wholesale Club has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile basic indicators, BJs Wholesale may actually be approaching a critical reversion point that can send shares even higher in February 2025.

MONGOLIAN MINING CRPREGS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MONGOLIAN MINING CRPREGS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with BJs Wholesale and MONGOLIAN MINING

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

The idea behind BJs Wholesale Club and MONGOLIAN MINING CRPREGS 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.