Correlation Between BJs Wholesale and Lands End
Can any of the company-specific risk be diversified away by investing in both BJs Wholesale and Lands End 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 Lands End 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 Lands End, you can compare the effects of market volatilities on BJs Wholesale and Lands End 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 Lands End. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Wholesale and Lands End.
Diversification Opportunities for BJs Wholesale and Lands End
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BJs and Lands is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding BJs Wholesale Club and Lands End in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lands End 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 Lands End. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lands End has no effect on the direction of BJs Wholesale i.e., BJs Wholesale and Lands End go up and down completely randomly.
Pair Corralation between BJs Wholesale and Lands End
Allowing for the 90-day total investment horizon BJs Wholesale is expected to generate 192.34 times less return on investment than Lands End. But when comparing it to its historical volatility, BJs Wholesale Club is 2.72 times less risky than Lands End. It trades about 0.01 of its potential returns per unit of risk. Lands End is currently generating about 0.5 of returns per unit of risk over similar time horizon. If you would invest 900.00 in Lands End on January 25, 2024 and sell it today you would earn a total of 473.00 from holding Lands End or generate 52.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BJs Wholesale Club vs. Lands End
Performance |
| Timeline |
| BJs Wholesale Club |
| Lands End |
BJs Wholesale and Lands End Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Wholesale and Lands End
The main advantage of trading using opposite BJs Wholesale and Lands End positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Wholesale position performs unexpectedly, Lands End 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 Lands End will offset losses from the drop in Lands End's long position.| BJs Wholesale vs. Big Lots | BJs Wholesale vs. Aquagold International | BJs Wholesale vs. Thrivent High Yield | BJs Wholesale vs. Morningstar Unconstrained Allocation |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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