Correlation Between BJs Restaurants and RESMINING UNSPADR10

Can any of the company-specific risk be diversified away by investing in both BJs Restaurants and RESMINING UNSPADR10 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 RESMINING UNSPADR10 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BJs Restaurants and RESMINING UNSPADR10, you can compare the effects of market volatilities on BJs Restaurants and RESMINING UNSPADR10 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 RESMINING UNSPADR10. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Restaurants and RESMINING UNSPADR10.

Diversification Opportunities for BJs Restaurants and RESMINING UNSPADR10

0.68

Correlation Coefficient

BJs Restaurants  RESMINING UNSPADR10

Poor diversification

The 3 months correlation between BJs and RESMINING is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and RESMINING UNSPADR10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RESMINING UNSPADR10 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 RESMINING UNSPADR10. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RESMINING UNSPADR10 has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and RESMINING UNSPADR10 go up and down completely randomly.

Pair Corralation between BJs Restaurants and RESMINING UNSPADR10

Assuming the 90 days trading horizon BJs Restaurants is expected to generate 2.58 times less return on investment than RESMINING UNSPADR10. But when comparing it to its historical volatility, BJs Restaurants is 1.45 times less risky than RESMINING UNSPADR10. It trades about 0.11 of its potential returns per unit of risk. RESMINING UNSPADR10 is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  230.00  in RESMINING UNSPADR10 on April 23, 2025 and sell it today you would earn a total of  118.00  from holding RESMINING UNSPADR10 or generate 51.3% return on investment over 90 days.

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

BJs Restaurants  vs.  RESMINING UNSPADR10

BJs Restaurants

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BJs Restaurants are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, BJs Restaurants unveiled solid returns over the last few months and may actually be approaching a breakup point.

RESMINING UNSPADR10

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in RESMINING UNSPADR10 are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady primary indicators, RESMINING UNSPADR10 reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BJs Restaurants and RESMINING UNSPADR10

The main advantage of trading using opposite BJs Restaurants and RESMINING UNSPADR10 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Restaurants position performs unexpectedly, RESMINING UNSPADR10 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 RESMINING UNSPADR10 will offset losses from the drop in RESMINING UNSPADR10's long position.

The idea behind BJs Restaurants and RESMINING UNSPADR10 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.