Correlation Between BJs Wholesale and Grupo Carso

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

Diversification Opportunities for BJs Wholesale and Grupo Carso

-0.09

Correlation Coefficient

BJs Wholesale  Grupo Carso

Good diversification

The 3 months correlation between BJs and Grupo is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding BJs Wholesale Club and Grupo Carso SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Carso SAB 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 Grupo Carso. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Carso SAB has no effect on the direction of BJs Wholesale i.e., BJs Wholesale and Grupo Carso go up and down completely randomly.

Pair Corralation between BJs Wholesale and Grupo Carso

Assuming the 90 days horizon BJs Wholesale Club is expected to under-perform the Grupo Carso. In addition to that, BJs Wholesale is 1.12 times more volatile than Grupo Carso SAB. It trades about -0.24 of its total potential returns per unit of risk. Grupo Carso SAB is currently generating about -0.24 per unit of volatility. If you would invest  555.00  in Grupo Carso SAB on October 7, 2024 and sell it today you would lose (25.00) from holding Grupo Carso SAB or give up 4.5% 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.  Grupo Carso SAB

BJs Wholesale Club

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BJs Wholesale Club are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, BJs Wholesale may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Grupo Carso SAB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grupo Carso SAB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with BJs Wholesale and Grupo Carso

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

The idea behind BJs Wholesale Club and Grupo Carso SAB 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.