Correlation Between BJs Restaurants and ANZNZ

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

By analyzing existing cross correlation between BJs Restaurants and ANZNZ 5175122 18 FEB 25, you can compare the effects of market volatilities on BJs Restaurants and ANZNZ 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 ANZNZ. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Restaurants and ANZNZ.

Diversification Opportunities for BJs Restaurants and ANZNZ

-0.53

Correlation Coefficient

BJs Restaurants  ANZNZ

Excellent diversification

The 3 months correlation between BJs and ANZNZ is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and ANZNZ 5175122 18 FEB 25 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANZNZ 5175122 18 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 ANZNZ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANZNZ 5175122 18 has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and ANZNZ go up and down completely randomly.

Pair Corralation between BJs Restaurants and ANZNZ

Given the investment horizon of 90 days BJs Restaurants is expected to under-perform the ANZNZ. In addition to that, BJs Restaurants is 110.18 times more volatile than ANZNZ 5175122 18 FEB 25. It trades about 0.0 of its total potential returns per unit of risk. ANZNZ 5175122 18 FEB 25 is currently generating about -0.07 per unit of volatility. If you would invest  10,016  in ANZNZ 5175122 18 FEB 25 on September 30, 2024 and sell it today you would lose (9.00) from holding ANZNZ 5175122 18 FEB 25 or give up 0.09% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	34.92%
Values	Daily Returns

BJs Restaurants  vs.  ANZNZ 5175122 18 FEB 25

BJs Restaurants

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BJs Restaurants are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, BJs Restaurants may actually be approaching a critical reversion point that can send shares even higher in January 2025.

ANZNZ 5175122 18

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ANZNZ 5175122 18 FEB 25 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, ANZNZ is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with BJs Restaurants and ANZNZ

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

The idea behind BJs Restaurants and ANZNZ 5175122 18 FEB 25 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.

Check out your portfolio center.

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.