Correlation Between Build A and BJs Wholesale

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

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

Diversification Opportunities for Build A and BJs Wholesale

0.39
  Correlation Coefficient
Build A Bear
BJs Wholesale Club

Weak diversification

The 3 months correlation between Build and BJs Wholesale is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Build A Bear Workshop Inc and BJs Wholesale Club Holdings I in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on BJs Wholesale Club and Build A 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 Build A Bear 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 Build A i.e. Build A and BJs Wholesale go up and down completely randomly.

Pair Corralation between Build A and BJs Wholesale

Considering the 30-days investment horizon, Build A Bear is expected to generate 1.98 times more return on investment than BJs Wholesale. However, Build A is 1.98 times more volatile than BJs Wholesale Club. It trades about 0.14 of its potential returns per unit of risk. BJs Wholesale Club is currently generating about 0.14 per unit of risk. If you would invest  125.00  in Build A Bear on June 6, 2020 and sell it today you would earn a total of  83.00  from holding Build A Bear or generate 66.4% return on investment over 30 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy98.41%
ValuesDaily Returns

Build A Bear Workshop Inc  vs.  BJs Wholesale Club Holdings I

 Performance (%) 
      Timeline 
Build A Bear 
99

Build A Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in Build A Bear are ranked lower than 9 (%) of all global equities and portfolios over the last 30 days. In spite of fairly unsteady primary indicators, Build A showed solid returns over the last few months and may actually be approaching a breakup point.
BJs Wholesale Club 
99

BJs Wholesale Risk-Adjusted Performance

Compared to the overall equity markets, risk-adjusted returns on investments in BJs Wholesale Club are ranked lower than 9 (%) of all global equities and portfolios over the last 30 days. Regardless of fairly unsteady technical and fundamental indicators, BJs Wholesale demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Build A and BJs Wholesale Volatility Contrast

 Predicted Return Density 
      Returns 
Check out your portfolio center. Please also try Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.


 
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