Correlation Between BJs Wholesale and Acorn International

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Can any of the company-specific risk be diversified away by investing in both BJs Wholesale and Acorn International 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 Acorn International 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 Acorn International, you can compare the effects of market volatilities on BJs Wholesale and Acorn International 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 Acorn International. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Wholesale and Acorn International.

Diversification Opportunities for BJs Wholesale and Acorn International

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  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between BJs Wholesale and Acorn International

If you would invest  6,481  in BJs Wholesale Club on December 29, 2023 and sell it today you would earn a total of  1,168  from holding BJs Wholesale Club or generate 18.02% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

BJs Wholesale Club  vs.  Acorn International

 Performance 
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BJs Wholesale Club 

Risk-Adjusted Performance

10 of 100

 
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OK
Compared to the overall equity markets, risk-adjusted returns on investments in BJs Wholesale Club are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating forward-looking indicators, BJs Wholesale revealed solid returns over the last few months and may actually be approaching a breakup point.
Acorn International 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days Acorn International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Acorn International is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

BJs Wholesale and Acorn International Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with BJs Wholesale and Acorn International

The main advantage of trading using opposite BJs Wholesale and Acorn International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Wholesale position performs unexpectedly, Acorn International 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 Acorn International will offset losses from the drop in Acorn International's long position.
The idea behind BJs Wholesale Club and Acorn International 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.

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