Correlation Between BJs Restaurants and GAMING FAC

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

By analyzing existing cross correlation between BJs Restaurants and GAMING FAC SA, you can compare the effects of market volatilities on BJs Restaurants and GAMING FAC 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 GAMING FAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Restaurants and GAMING FAC.

Diversification Opportunities for BJs Restaurants and GAMING FAC

-0.52

Correlation Coefficient

BJs Restaurants  GAMING FAC

Excellent diversification

The 3 months correlation between BJs and GAMING is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and GAMING FAC SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAMING FAC SA 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 GAMING FAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAMING FAC SA has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and GAMING FAC go up and down completely randomly.

Pair Corralation between BJs Restaurants and GAMING FAC

Assuming the 90 days trading horizon BJs Restaurants is expected to under-perform the GAMING FAC. But the stock apears to be less risky and, when comparing its historical volatility, BJs Restaurants is 1.58 times less risky than GAMING FAC. The stock trades about -0.03 of its potential returns per unit of risk. The GAMING FAC SA is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  155.00  in GAMING FAC SA on October 23, 2024 and sell it today you would earn a total of  16.00  from holding GAMING FAC SA or generate 10.32% return on investment over 90 days.

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

BJs Restaurants  vs.  GAMING FAC SA

BJs Restaurants

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BJs Restaurants are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, BJs Restaurants is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

GAMING FAC SA

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GAMING FAC SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, GAMING FAC is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with BJs Restaurants and GAMING FAC

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

The idea behind BJs Restaurants and GAMING FAC SA 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.