Correlation Between BJs Restaurants and SANOK RUBBER

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

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

Diversification Opportunities for BJs Restaurants and SANOK RUBBER

-0.23

Correlation Coefficient

BJs Restaurants  SANOK RUBBER

Very good diversification

The 3 months correlation between BJs and SANOK is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and SANOK RUBBER ZY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SANOK RUBBER ZY and BJs Restaurants 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 BJs Restaurants are associated (or correlated) with SANOK RUBBER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SANOK RUBBER ZY has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and SANOK RUBBER go up and down completely randomly.

Pair Corralation between BJs Restaurants and SANOK RUBBER

Assuming the 90 days trading horizon BJs Restaurants is expected to under-perform the SANOK RUBBER. But the stock apears to be less risky and, when comparing its historical volatility, BJs Restaurants is 1.13 times less risky than SANOK RUBBER. The stock trades about -0.1 of its potential returns per unit of risk. The SANOK RUBBER ZY is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  455.00  in SANOK RUBBER ZY on December 19, 2024 and sell it today you would earn a total of  69.00  from holding SANOK RUBBER ZY or generate 15.16% return on investment over 90 days.

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

BJs Restaurants  vs.  SANOK RUBBER ZY

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 uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

SANOK RUBBER ZY

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SANOK RUBBER ZY are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, SANOK RUBBER reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BJs Restaurants and SANOK RUBBER

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

The idea behind BJs Restaurants and SANOK RUBBER ZY 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.