Correlation Between BJs Restaurants and Everus Construction

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

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

Diversification Opportunities for BJs Restaurants and Everus Construction

0.13

Correlation Coefficient

BJs Restaurants  Everus Construction

Average diversification

The 3 months correlation between BJs and Everus is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and Everus Construction Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Everus Construction 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 Everus Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Everus Construction has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and Everus Construction go up and down completely randomly.

Pair Corralation between BJs Restaurants and Everus Construction

Given the investment horizon of 90 days BJs Restaurants is expected to generate 0.47 times more return on investment than Everus Construction. However, BJs Restaurants is 2.12 times less risky than Everus Construction. It trades about 0.01 of its potential returns per unit of risk. Everus Construction Group is currently generating about -0.2 per unit of risk. If you would invest  3,562  in BJs Restaurants on December 26, 2024 and sell it today you would earn a total of  10.00  from holding BJs Restaurants or generate 0.28% return on investment over 90 days.

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

BJs Restaurants  vs.  Everus Construction Group

BJs Restaurants

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BJs Restaurants are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, BJs Restaurants is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Everus Construction

Risk-Adjusted Performance

Very Weak

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

Pair Trading with BJs Restaurants and Everus Construction

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

The idea behind BJs Restaurants and Everus Construction Group 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.