Correlation Between KGHM Polska and BJs Wholesale
Can any of the company-specific risk be diversified away by investing in both KGHM Polska and BJs Wholesale 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 KGHM Polska and BJs Wholesale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KGHM Polska Miedz and BJs Wholesale Club, you can compare the effects of market volatilities on KGHM Polska and BJs Wholesale 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 KGHM Polska with a short position of BJs Wholesale. Check out your portfolio center. Please also check ongoing floating volatility patterns of KGHM Polska and BJs Wholesale.
Diversification Opportunities for KGHM Polska and BJs Wholesale
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between KGHM and BJs is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding KGHM Polska Miedz and BJs Wholesale Club in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BJs Wholesale Club and KGHM Polska 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 KGHM Polska Miedz are associated (or correlated) with BJs Wholesale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BJs Wholesale Club has no effect on the direction of KGHM Polska i.e., KGHM Polska and BJs Wholesale go up and down completely randomly.
Pair Corralation between KGHM Polska and BJs Wholesale
Assuming the 90 days trading horizon KGHM Polska Miedz is expected to under-perform the BJs Wholesale. In addition to that, KGHM Polska is 1.51 times more volatile than BJs Wholesale Club. It trades about -0.05 of its total potential returns per unit of risk. BJs Wholesale Club is currently generating about 0.05 per unit of volatility. If you would invest 8,150 in BJs Wholesale Club on September 25, 2024 and sell it today you would earn a total of 800.00 from holding BJs Wholesale Club or generate 9.82% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
KGHM Polska Miedz vs. BJs Wholesale Club
Performance |
Timeline |
KGHM Polska Miedz |
BJs Wholesale Club |
KGHM Polska and BJs Wholesale Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with KGHM Polska and BJs Wholesale
The main advantage of trading using opposite KGHM Polska and BJs Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KGHM Polska position performs unexpectedly, BJs Wholesale 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 Wholesale will offset losses from the drop in BJs Wholesale's long position.KGHM Polska vs. BJs Wholesale Club | KGHM Polska vs. COMPUTERSHARE | KGHM Polska vs. INTERSHOP Communications Aktiengesellschaft | KGHM Polska vs. QURATE RETAIL INC |
BJs Wholesale vs. Walmart | BJs Wholesale vs. Walmart | BJs Wholesale vs. Costco Wholesale | BJs Wholesale vs. Target |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
Content Syndication Quickly integrate customizable finance content to your own investment portal |