Correlation Between Commercial Vehicle and BJs Restaurants

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

By analyzing existing cross correlation between Commercial Vehicle Group and BJs Restaurants, you can compare the effects of market volatilities on Commercial Vehicle and BJs Restaurants 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 Commercial Vehicle with a short position of BJs Restaurants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commercial Vehicle and BJs Restaurants.

Diversification Opportunities for Commercial Vehicle and BJs Restaurants

-0.57

Correlation Coefficient

Commercial Vehicle  BJs Restaurants

Excellent diversification

The 3 months correlation between Commercial and BJs is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Commercial Vehicle Group and BJs Restaurants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BJs Restaurants and Commercial Vehicle 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 Commercial Vehicle Group are associated (or correlated) with BJs Restaurants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BJs Restaurants has no effect on the direction of Commercial Vehicle i.e., Commercial Vehicle and BJs Restaurants go up and down completely randomly.

Pair Corralation between Commercial Vehicle and BJs Restaurants

Assuming the 90 days trading horizon Commercial Vehicle Group is expected to generate 1.76 times more return on investment than BJs Restaurants. However, Commercial Vehicle is 1.76 times more volatile than BJs Restaurants. It trades about 0.07 of its potential returns per unit of risk. BJs Restaurants is currently generating about -0.03 per unit of risk. If you would invest  206.00  in Commercial Vehicle Group on October 22, 2024 and sell it today you would earn a total of  6.00  from holding Commercial Vehicle Group or generate 2.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Commercial Vehicle Group  vs.  BJs Restaurants

Commercial Vehicle

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Commercial Vehicle Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

BJs Restaurants

Risk-Adjusted Performance

1 of 100

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. In spite of comparatively stable basic indicators, BJs Restaurants is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Commercial Vehicle and BJs Restaurants

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

The idea behind Commercial Vehicle Group and BJs Restaurants 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.