Correlation Between Bjs Wholesale and Compania Cervecerias

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Bjs Wholesale and Compania Cervecerias 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 Wholesale and Compania Cervecerias into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bjs Wholesale Club and Compania Cervecerias Unidas, you can compare the effects of market volatilities on Bjs Wholesale and Compania Cervecerias 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 Wholesale with a short position of Compania Cervecerias. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bjs Wholesale and Compania Cervecerias.

Diversification Opportunities for Bjs Wholesale and Compania Cervecerias

-0.68
  Correlation Coefficient

Excellent diversification

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

Pair Corralation between Bjs Wholesale and Compania Cervecerias

Allowing for the 90-day total investment horizon Bjs Wholesale is expected to generate 2.25 times less return on investment than Compania Cervecerias. But when comparing it to its historical volatility, Bjs Wholesale Club is 1.67 times less risky than Compania Cervecerias. It trades about 0.01 of its potential returns per unit of risk. Compania Cervecerias Unidas is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,109  in Compania Cervecerias Unidas on July 6, 2022 and sell it today you would earn a total of  2.00  from holding Compania Cervecerias Unidas or generate 0.18% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Bjs Wholesale Club  vs.  Compania Cervecerias Unidas

 Performance (%) 
       Timeline  
Bjs Wholesale Club 
Bjs Wholesale Performance
9 of 100
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 90 days. Despite fairly conflicting forward-looking indicators, Bjs Wholesale demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Bjs Wholesale Price Channel

Compania Cervecerias 
Compania Performance
0 of 100
Over the last 90 days Compania Cervecerias Unidas has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Compania Price Channel

Bjs Wholesale and Compania Cervecerias Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bjs Wholesale and Compania Cervecerias

The main advantage of trading using opposite Bjs Wholesale and Compania Cervecerias positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bjs Wholesale position performs unexpectedly, Compania Cervecerias 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 Compania Cervecerias will offset losses from the drop in Compania Cervecerias' long position.
Bjs Wholesale vs. Amazon Inc
The idea behind Bjs Wholesale Club and Compania Cervecerias Unidas 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.
Compania Cervecerias vs. Amazon Inc
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.

Other Complementary Tools

Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Go
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets
Go
Commodity Channel Index
Use Commodity Channel Index to analyze current equity momentum
Go
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Go
CEO Directory
Screen CEOs from public companies around the world
Go
Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Go
Price Ceiling Movement
Calculate and plot Price Ceiling Movement for different equity instruments
Go