Correlation Between BJs Restaurants and Arthur J

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

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

Diversification Opportunities for BJs Restaurants and Arthur J

0.49

Correlation Coefficient

BJs Restaurants  Arthur J

Very weak diversification

The 3 months correlation between BJs and Arthur is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and Arthur J Gallagher in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arthur J Gallagher 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 Arthur J. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arthur J Gallagher has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and Arthur J go up and down completely randomly.

Pair Corralation between BJs Restaurants and Arthur J

Assuming the 90 days trading horizon BJs Restaurants is expected to generate 3.46 times less return on investment than Arthur J. In addition to that, BJs Restaurants is 1.6 times more volatile than Arthur J Gallagher. It trades about 0.02 of its total potential returns per unit of risk. Arthur J Gallagher is currently generating about 0.09 per unit of volatility. If you would invest  26,435  in Arthur J Gallagher on October 21, 2024 and sell it today you would earn a total of  2,185  from holding Arthur J Gallagher or generate 8.27% return on investment over 90 days.

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

BJs Restaurants  vs.  Arthur J Gallagher

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 current stock price uproar, may contribute to short-horizon losses for the private investors.

Arthur J Gallagher

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Arthur J Gallagher are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Arthur J may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with BJs Restaurants and Arthur J

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

The idea behind BJs Restaurants and Arthur J Gallagher 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..