Correlation Between BJs Wholesale and Uber Technologies,

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

Diversification Opportunities for BJs Wholesale and Uber Technologies,

0.63

Correlation Coefficient

BJs Wholesale  Uber Technologies,

Poor diversification

The 3 months correlation between BJs and Uber is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding BJs Wholesale Club and Uber Technologies, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uber Technologies, 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 Uber Technologies,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uber Technologies, has no effect on the direction of BJs Wholesale i.e., BJs Wholesale and Uber Technologies, go up and down completely randomly.

Pair Corralation between BJs Wholesale and Uber Technologies,

Assuming the 90 days horizon BJs Wholesale is expected to generate 1.43 times less return on investment than Uber Technologies,. But when comparing it to its historical volatility, BJs Wholesale Club is 1.99 times less risky than Uber Technologies,. It trades about 0.1 of its potential returns per unit of risk. Uber Technologies, is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  2,360  in Uber Technologies, on December 20, 2024 and sell it today you would earn a total of  380.00  from holding Uber Technologies, or generate 16.1% return on investment over 90 days.

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

BJs Wholesale Club  vs.  Uber Technologies,

BJs Wholesale Club

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BJs Wholesale Club are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, BJs Wholesale reported solid returns over the last few months and may actually be approaching a breakup point.

Uber Technologies,

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Uber Technologies, are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Uber Technologies, reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BJs Wholesale and Uber Technologies,

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

The idea behind BJs Wholesale Club and Uber Technologies, 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.