Correlation Between BJs Restaurants and Ainos

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

By analyzing existing cross correlation between BJs Restaurants and Ainos Inc, you can compare the effects of market volatilities on BJs Restaurants and Ainos 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 Ainos. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Restaurants and Ainos.

Diversification Opportunities for BJs Restaurants and Ainos

-0.38

Correlation Coefficient

BJs Restaurants  Ainos

Very good diversification

The 3 months correlation between BJs and Ainos is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and Ainos Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ainos Inc 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 Ainos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ainos Inc has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and Ainos go up and down completely randomly.

Pair Corralation between BJs Restaurants and Ainos

Given the investment horizon of 90 days BJs Restaurants is expected to generate 19116.55 times less return on investment than Ainos. But when comparing it to its historical volatility, BJs Restaurants is 93.03 times less risky than Ainos. It trades about 0.0 of its potential returns per unit of risk. Ainos Inc is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  0.00  in Ainos Inc on October 22, 2024 and sell it today you would earn a total of  12.00  from holding Ainos Inc or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	34.4%
Values	Daily Returns

BJs Restaurants  vs.  Ainos Inc

BJs Restaurants

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BJs Restaurants has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, BJs Restaurants is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Ainos Inc

Risk-Adjusted Performance

23 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Ainos Inc are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental indicators, Ainos showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BJs Restaurants and Ainos

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

The idea behind BJs Restaurants and Ainos Inc 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.