Correlation Between BJs Wholesale and KGHM Polska
Can any of the company-specific risk be diversified away by investing in both BJs Wholesale and KGHM Polska 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 KGHM Polska 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 KGHM Polska Miedz, you can compare the effects of market volatilities on BJs Wholesale and KGHM Polska 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 KGHM Polska. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Wholesale and KGHM Polska.
Diversification Opportunities for BJs Wholesale and KGHM Polska
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BJs and KGHM is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding BJs Wholesale Club and KGHM Polska Miedz in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KGHM Polska Miedz 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 KGHM Polska. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KGHM Polska Miedz has no effect on the direction of BJs Wholesale i.e., BJs Wholesale and KGHM Polska go up and down completely randomly.
Pair Corralation between BJs Wholesale and KGHM Polska
Assuming the 90 days horizon BJs Wholesale Club is expected to generate 0.5 times more return on investment than KGHM Polska. However, BJs Wholesale Club is 1.98 times less risky than KGHM Polska. It trades about -0.19 of its potential returns per unit of risk. KGHM Polska Miedz is currently generating about -0.17 per unit of risk. If you would invest 9,350 in BJs Wholesale Club on September 26, 2024 and sell it today you would lose (450.00) from holding BJs Wholesale Club or give up 4.81% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
BJs Wholesale Club vs. KGHM Polska Miedz
Performance |
Timeline |
BJs Wholesale Club |
KGHM Polska Miedz |
BJs Wholesale and KGHM Polska Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BJs Wholesale and KGHM Polska
The main advantage of trading using opposite BJs Wholesale and KGHM Polska positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Wholesale position performs unexpectedly, KGHM Polska 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 KGHM Polska will offset losses from the drop in KGHM Polska's long position.BJs Wholesale vs. New Residential Investment | BJs Wholesale vs. CPU SOFTWAREHOUSE | BJs Wholesale vs. ATOSS SOFTWARE | BJs Wholesale vs. Virtus Investment Partners |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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