Correlation Between BJs Restaurants and NCR Voyix

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

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

Diversification Opportunities for BJs Restaurants and NCR Voyix

0.15

Correlation Coefficient

BJs Restaurants  NCR Voyix

Average diversification

The 3 months correlation between BJs and NCR is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and NCR Voyix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NCR Voyix 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 NCR Voyix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NCR Voyix has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and NCR Voyix go up and down completely randomly.

Pair Corralation between BJs Restaurants and NCR Voyix

Given the investment horizon of 90 days BJs Restaurants is expected to generate 0.96 times more return on investment than NCR Voyix. However, BJs Restaurants is 1.04 times less risky than NCR Voyix. It trades about -0.09 of its potential returns per unit of risk. NCR Voyix is currently generating about -0.3 per unit of risk. If you would invest  3,733  in BJs Restaurants on December 17, 2024 and sell it today you would lose (497.00) from holding BJs Restaurants or give up 13.31% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

BJs Restaurants  vs.  NCR Voyix

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 inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

NCR Voyix

Risk-Adjusted Performance

Very Weak

Over the last 90 days NCR Voyix has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with BJs Restaurants and NCR Voyix

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

The idea behind BJs Restaurants and NCR Voyix 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.