Correlation Between BJs Restaurants and SEALSQ Corp

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

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

Diversification Opportunities for BJs Restaurants and SEALSQ Corp

-0.01

Correlation Coefficient

BJs Restaurants  SEALSQ Corp

Good diversification

The 3 months correlation between BJs and SEALSQ is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and SEALSQ Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEALSQ Corp 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 SEALSQ Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEALSQ Corp has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and SEALSQ Corp go up and down completely randomly.

Pair Corralation between BJs Restaurants and SEALSQ Corp

Given the investment horizon of 90 days BJs Restaurants is expected to generate 10.42 times less return on investment than SEALSQ Corp. But when comparing it to its historical volatility, BJs Restaurants is 5.2 times less risky than SEALSQ Corp. It trades about 0.02 of its potential returns per unit of risk. SEALSQ Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,540  in SEALSQ Corp on October 4, 2024 and sell it today you would lose (710.00) from holding SEALSQ Corp or give up 46.1% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	82.26%
Values	Daily Returns

BJs Restaurants  vs.  SEALSQ Corp

BJs Restaurants

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BJs Restaurants are ranked lower than 2 (%) 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 recent stock price confusion, may contribute to short-horizon losses for the traders.

SEALSQ Corp

Risk-Adjusted Performance

23 of 100

Solid

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

Pair Trading with BJs Restaurants and SEALSQ Corp

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

The idea behind BJs Restaurants and SEALSQ Corp 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.