Correlation Between Lands End and BJs Wholesale
Can any of the company-specific risk be diversified away by investing in both Lands End and BJs Wholesale 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 Lands End and BJs Wholesale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lands End and BJs Wholesale Club, you can compare the effects of market volatilities on Lands End and BJs Wholesale 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 Lands End with a short position of BJs Wholesale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lands End and BJs Wholesale.
Diversification Opportunities for Lands End and BJs Wholesale
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lands and BJs is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Lands End and BJs Wholesale Club in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BJs Wholesale Club and Lands End 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 Lands End are associated (or correlated) with BJs Wholesale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BJs Wholesale Club has no effect on the direction of Lands End i.e., Lands End and BJs Wholesale go up and down completely randomly.
Pair Corralation between Lands End and BJs Wholesale
Allowing for the 90-day total investment horizon Lands End is expected to generate 2.83 times more return on investment than BJs Wholesale. However, Lands End is 2.83 times more volatile than BJs Wholesale Club. It trades about 0.39 of its potential returns per unit of risk. BJs Wholesale Club is currently generating about 0.05 per unit of risk. If you would invest 930.00 in Lands End on January 26, 2024 and sell it today you would earn a total of 380.00 from holding Lands End or generate 40.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lands End vs. BJs Wholesale Club
Performance |
| Timeline |
| Lands End |
| BJs Wholesale Club |
Lands End and BJs Wholesale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lands End and BJs Wholesale
The main advantage of trading using opposite Lands End and BJs Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lands End position performs unexpectedly, BJs Wholesale 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 BJs Wholesale will offset losses from the drop in BJs Wholesale's long position.| Lands End vs. Tillys Inc | Lands End vs. Zumiez Inc | Lands End vs. Citi Trends | Lands End vs. Cato Corporation |
| BJs Wholesale vs. Big Lots | BJs Wholesale vs. Dollar Tree | BJs Wholesale vs. Dicks Sporting Goods | BJs Wholesale vs. Williams Sonoma |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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