Correlation Between BJs Restaurants and Sacks Parente

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

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

Diversification Opportunities for BJs Restaurants and Sacks Parente

0.31

Correlation Coefficient

BJs Restaurants  Sacks Parente

Weak diversification

The 3 months correlation between BJs and Sacks is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and Sacks Parente Golf, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sacks Parente Golf, 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 Sacks Parente. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sacks Parente Golf, has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and Sacks Parente go up and down completely randomly.

Pair Corralation between BJs Restaurants and Sacks Parente

Given the investment horizon of 90 days BJs Restaurants is expected to generate 4.03 times less return on investment than Sacks Parente. But when comparing it to its historical volatility, BJs Restaurants is 10.39 times less risky than Sacks Parente. It trades about 0.03 of its potential returns per unit of risk. Sacks Parente Golf, is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  36.00  in Sacks Parente Golf, on December 27, 2024 and sell it today you would lose (26.00) from holding Sacks Parente Golf, or give up 72.22% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	88.33%
Values	Daily Returns

BJs Restaurants  vs.  Sacks Parente Golf,

BJs Restaurants

Risk-Adjusted Performance

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.

Sacks Parente Golf,

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sacks Parente Golf, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather unfluctuating technical and fundamental indicators, Sacks Parente exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BJs Restaurants and Sacks Parente

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

The idea behind BJs Restaurants and Sacks Parente Golf, 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.