Correlation Between BJs Restaurants and Eva Live

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

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

Diversification Opportunities for BJs Restaurants and Eva Live

-0.19

Correlation Coefficient

BJs Restaurants  Eva Live

Good diversification

The 3 months correlation between BJs and Eva is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and Eva Live in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eva Live 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 Eva Live. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eva Live has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and Eva Live go up and down completely randomly.

Pair Corralation between BJs Restaurants and Eva Live

Given the investment horizon of 90 days BJs Restaurants is expected to under-perform the Eva Live. But the stock apears to be less risky and, when comparing its historical volatility, BJs Restaurants is 13.51 times less risky than Eva Live. The stock trades about -0.05 of its potential returns per unit of risk. The Eva Live is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  211.00  in Eva Live on October 23, 2024 and sell it today you would earn a total of  89.00  from holding Eva Live or generate 42.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.0%
Values	Daily Returns

BJs Restaurants  vs.  Eva Live

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.

Eva Live

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eva Live are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain basic indicators, Eva Live demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BJs Restaurants and Eva Live

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

The idea behind BJs Restaurants and Eva Live 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.