Correlation Between SAFEROADS HLDGS and BJs Restaurants

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

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

Diversification Opportunities for SAFEROADS HLDGS and BJs Restaurants

0.0

Correlation Coefficient

SAFEROADS HLDGS  BJs Restaurants

Pay attention - limited upside

The 3 months correlation between SAFEROADS and BJs is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SAFEROADS HLDGS and BJs Restaurants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BJs Restaurants and SAFEROADS HLDGS 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 SAFEROADS HLDGS 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 SAFEROADS HLDGS i.e., SAFEROADS HLDGS and BJs Restaurants go up and down completely randomly.

Pair Corralation between SAFEROADS HLDGS and BJs Restaurants

If you would invest  13.00  in SAFEROADS HLDGS on December 23, 2024 and sell it today you would earn a total of  0.00  from holding SAFEROADS HLDGS or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

SAFEROADS HLDGS  vs.  BJs Restaurants

SAFEROADS HLDGS

Risk-Adjusted Performance

Very Weak

Over the last 90 days SAFEROADS HLDGS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, SAFEROADS HLDGS is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

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. 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 SAFEROADS HLDGS and BJs Restaurants

The main advantage of trading using opposite SAFEROADS HLDGS and BJs Restaurants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAFEROADS HLDGS 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 SAFEROADS HLDGS 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.