Correlation Between BJs Restaurants and Centene

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

By analyzing existing cross correlation between BJs Restaurants and Centene 3375 percent, you can compare the effects of market volatilities on BJs Restaurants and Centene 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 Centene. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Restaurants and Centene.

Diversification Opportunities for BJs Restaurants and Centene

0.26

Correlation Coefficient

BJs Restaurants  Centene

Modest diversification

The 3 months correlation between BJs and Centene is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and Centene 3375 percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centene 3375 percent 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 Centene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centene 3375 percent has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and Centene go up and down completely randomly.

Pair Corralation between BJs Restaurants and Centene

Given the investment horizon of 90 days BJs Restaurants is expected to under-perform the Centene. In addition to that, BJs Restaurants is 6.68 times more volatile than Centene 3375 percent. It trades about -0.01 of its total potential returns per unit of risk. Centene 3375 percent is currently generating about 0.02 per unit of volatility. If you would invest  8,877  in Centene 3375 percent on December 21, 2024 and sell it today you would earn a total of  39.00  from holding Centene 3375 percent or generate 0.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

BJs Restaurants  vs.  Centene 3375 percent

BJs Restaurants

Risk-Adjusted Performance

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.

Centene 3375 percent

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Centene 3375 percent are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Centene is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with BJs Restaurants and Centene

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

The idea behind BJs Restaurants and Centene 3375 percent 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.