Correlation Between BJs Restaurants and LLOYDS

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

By analyzing existing cross correlation between BJs Restaurants and LLOYDS 3369 14 DEC 46, you can compare the effects of market volatilities on BJs Restaurants and LLOYDS 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 LLOYDS. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Restaurants and LLOYDS.

Diversification Opportunities for BJs Restaurants and LLOYDS

-0.16

Correlation Coefficient

BJs Restaurants  LLOYDS

Good diversification

The 3 months correlation between BJs and LLOYDS is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and LLOYDS 3369 14 DEC 46 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LLOYDS 3369 14 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 LLOYDS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LLOYDS 3369 14 has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and LLOYDS go up and down completely randomly.

Pair Corralation between BJs Restaurants and LLOYDS

Given the investment horizon of 90 days BJs Restaurants is expected to generate 0.87 times more return on investment than LLOYDS. However, BJs Restaurants is 1.14 times less risky than LLOYDS. It trades about 0.02 of its potential returns per unit of risk. LLOYDS 3369 14 DEC 46 is currently generating about -0.01 per unit of risk. If you would invest  3,482  in BJs Restaurants on December 30, 2024 and sell it today you would earn a total of  24.00  from holding BJs Restaurants or generate 0.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	64.52%
Values	Daily Returns

BJs Restaurants  vs.  LLOYDS 3369 14 DEC 46

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 recent stock price confusion, may contribute to short-horizon losses for the traders.

LLOYDS 3369 14

Risk-Adjusted Performance

Very Weak

Over the last 90 days LLOYDS 3369 14 DEC 46 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, LLOYDS is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with BJs Restaurants and LLOYDS

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

The idea behind BJs Restaurants and LLOYDS 3369 14 DEC 46 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 CEOs Directory module to screen CEOs from public companies around the world.