Correlation Between BJs Restaurants and Lottery, Common

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

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

Diversification Opportunities for BJs Restaurants and Lottery, Common

0.03

Correlation Coefficient

BJs Restaurants  Lottery, Common

Significant diversification

The 3 months correlation between BJs and Lottery, is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and Lottery, Common Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lottery, Common Stock 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 Lottery, Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lottery, Common Stock has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and Lottery, Common go up and down completely randomly.

Pair Corralation between BJs Restaurants and Lottery, Common

Given the investment horizon of 90 days BJs Restaurants is expected to generate 165.9 times less return on investment than Lottery, Common. But when comparing it to its historical volatility, BJs Restaurants is 14.6 times less risky than Lottery, Common. It trades about 0.01 of its potential returns per unit of risk. Lottery, Common Stock is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  35.00  in Lottery, Common Stock on November 28, 2024 and sell it today you would earn a total of  99.00  from holding Lottery, Common Stock or generate 282.86% 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.  Lottery, Common Stock

BJs Restaurants

Risk-Adjusted Performance

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.

Lottery, Common Stock

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lottery, Common Stock are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Lottery, Common showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BJs Restaurants and Lottery, Common

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

The idea behind BJs Restaurants and Lottery, Common Stock 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.