Correlation Between Jack In and BJs Restaurants

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

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

Diversification Opportunities for Jack In and BJs Restaurants

0.37

Correlation Coefficient

Jack In  BJs Restaurants

Weak diversification

The 3 months correlation between Jack and BJs is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Jack In The and BJs Restaurants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BJs Restaurants and Jack In 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 Jack In The 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 Jack In i.e., Jack In and BJs Restaurants go up and down completely randomly.

Pair Corralation between Jack In and BJs Restaurants

Given the investment horizon of 90 days Jack In The is expected to under-perform the BJs Restaurants. In addition to that, Jack In is 1.01 times more volatile than BJs Restaurants. It trades about -0.06 of its total potential returns per unit of risk. BJs Restaurants is currently generating about 0.05 per unit of volatility. If you would invest  3,256  in BJs Restaurants on September 29, 2024 and sell it today you would earn a total of  218.00  from holding BJs Restaurants or generate 6.7% return on investment over 90 days.

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

Jack In The  vs.  BJs Restaurants

Jack In

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jack In The has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

BJs Restaurants

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BJs Restaurants are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, BJs Restaurants may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Jack In and BJs Restaurants

The main advantage of trading using opposite Jack In and BJs Restaurants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jack In 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 Jack In The 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.