Correlation Between BJs Restaurants and 26442CAR5

Can any of the company-specific risk be diversified away by investing in both BJs Restaurants and 26442CAR5 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 26442CAR5 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BJs Restaurants and DUKE ENERGY CAROLINAS, you can compare the effects of market volatilities on BJs Restaurants and 26442CAR5 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 26442CAR5. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Restaurants and 26442CAR5.

Diversification Opportunities for BJs Restaurants and 26442CAR5

0.25

Correlation Coefficient

BJs Restaurants  26442CAR5

Modest diversification

The 3 months correlation between BJs and 26442CAR5 is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and DUKE ENERGY CAROLINAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DUKE ENERGY CAROLINAS 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 26442CAR5. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DUKE ENERGY CAROLINAS has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and 26442CAR5 go up and down completely randomly.

Pair Corralation between BJs Restaurants and 26442CAR5

Given the investment horizon of 90 days BJs Restaurants is expected to generate 2.39 times more return on investment than 26442CAR5. However, BJs Restaurants is 2.39 times more volatile than DUKE ENERGY CAROLINAS. It trades about 0.0 of its potential returns per unit of risk. DUKE ENERGY CAROLINAS is currently generating about -0.07 per unit of risk. If you would invest  3,577  in BJs Restaurants on October 24, 2024 and sell it today you would lose (64.00) from holding BJs Restaurants or give up 1.79% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	60.0%
Values	Daily Returns

BJs Restaurants  vs.  DUKE ENERGY CAROLINAS

BJs Restaurants

Risk-Adjusted Performance

0 of 100

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.

DUKE ENERGY CAROLINAS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DUKE ENERGY CAROLINAS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 26442CAR5 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 26442CAR5

The main advantage of trading using opposite BJs Restaurants and 26442CAR5 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Restaurants position performs unexpectedly, 26442CAR5 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 26442CAR5 will offset losses from the drop in 26442CAR5's long position.

The idea behind BJs Restaurants and DUKE ENERGY CAROLINAS 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 Stocks Directory module to find actively traded stocks across global markets.