Correlation Between Ollies Bargain and BJs Wholesale
Can any of the company-specific risk be diversified away by investing in both Ollies Bargain 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 Ollies Bargain and BJs Wholesale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ollies Bargain Outlet and BJs Wholesale Club, you can compare the effects of market volatilities on Ollies Bargain 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 Ollies Bargain with a short position of BJs Wholesale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ollies Bargain and BJs Wholesale.
Diversification Opportunities for Ollies Bargain and BJs Wholesale
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ollies and BJs is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ollies Bargain Outlet and BJs Wholesale Club in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BJs Wholesale Club and Ollies Bargain 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 Ollies Bargain Outlet 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 Ollies Bargain i.e., Ollies Bargain and BJs Wholesale go up and down completely randomly.
Pair Corralation between Ollies Bargain and BJs Wholesale
Given the investment horizon of 90 days Ollies Bargain Outlet is expected to generate 1.4 times more return on investment than BJs Wholesale. However, Ollies Bargain is 1.4 times more volatile than BJs Wholesale Club. It trades about 0.05 of its potential returns per unit of risk. BJs Wholesale Club is currently generating about 0.03 per unit of risk. If you would invest 4,814 in Ollies Bargain Outlet on January 26, 2024 and sell it today you would earn a total of 2,657 from holding Ollies Bargain Outlet or generate 55.19% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Ollies Bargain Outlet vs. BJs Wholesale Club
Performance |
Timeline |
Ollies Bargain Outlet |
BJs Wholesale Club |
Ollies Bargain and BJs Wholesale Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ollies Bargain and BJs Wholesale
The main advantage of trading using opposite Ollies Bargain and BJs Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ollies Bargain position performs unexpectedly, BJs Wholesale 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 Wholesale will offset losses from the drop in BJs Wholesale's long position.Ollies Bargain vs. PriceSmart | Ollies Bargain vs. BBB Foods | Ollies Bargain vs. Costco Wholesale Corp | Ollies Bargain vs. Wayfair |
BJs Wholesale vs. Big Lots | BJs Wholesale vs. Dollar Tree | BJs Wholesale vs. Dicks Sporting Goods | BJs Wholesale vs. Williams Sonoma |
Check out your portfolio center.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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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