Correlation Between PICKN PAY and BJs Wholesale
Can any of the company-specific risk be diversified away by investing in both PICKN PAY 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 PICKN PAY and BJs Wholesale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PICKN PAY STORES and BJs Wholesale Club, you can compare the effects of market volatilities on PICKN PAY 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 PICKN PAY with a short position of BJs Wholesale. Check out your portfolio center. Please also check ongoing floating volatility patterns of PICKN PAY and BJs Wholesale.
Diversification Opportunities for PICKN PAY and BJs Wholesale
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PICKN and BJs is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding PICKN PAY STORES 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 PICKN PAY 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 PICKN PAY STORES 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 PICKN PAY i.e., PICKN PAY and BJs Wholesale go up and down completely randomly.
Pair Corralation between PICKN PAY and BJs Wholesale
Assuming the 90 days trading horizon PICKN PAY STORES is expected to under-perform the BJs Wholesale. In addition to that, PICKN PAY is 1.17 times more volatile than BJs Wholesale Club. It trades about -0.04 of its total potential returns per unit of risk. BJs Wholesale Club is currently generating about 0.11 per unit of volatility. If you would invest 8,800 in BJs Wholesale Club on December 28, 2024 and sell it today you would earn a total of 1,400 from holding BJs Wholesale Club or generate 15.91% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
PICKN PAY STORES vs. BJs Wholesale Club
Performance |
Timeline |
PICKN PAY STORES |
BJs Wholesale Club |
PICKN PAY and BJs Wholesale Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PICKN PAY and BJs Wholesale
The main advantage of trading using opposite PICKN PAY and BJs Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PICKN PAY 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.PICKN PAY vs. GALENA MINING LTD | PICKN PAY vs. FIREWEED METALS P | PICKN PAY vs. Calibre Mining Corp | PICKN PAY vs. AEGEAN AIRLINES |
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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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