Correlation Between BJs Restaurants and Singing Machine

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

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

Diversification Opportunities for BJs Restaurants and Singing Machine

0.0

Correlation Coefficient

BJs Restaurants  Singing Machine

Pay attention - limited upside

The 3 months correlation between BJs and Singing is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and Singing Machine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singing Machine 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 Singing Machine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singing Machine has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and Singing Machine go up and down completely randomly.

Pair Corralation between BJs Restaurants and Singing Machine

If you would invest (100.00) in Singing Machine on February 1, 2024 and sell it today you would earn a total of  100.00  from holding Singing Machine or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

BJs Restaurants  vs.  Singing Machine

BJs Restaurants

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BJs Restaurants has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Singing Machine

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Singing Machine has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Singing Machine is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with BJs Restaurants and Singing Machine

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

The idea behind BJs Restaurants and Singing Machine 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.

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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.