Correlation Between BJs Wholesale and ECHO INVESTMENT

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

Diversification Opportunities for BJs Wholesale and ECHO INVESTMENT

-0.72

Correlation Coefficient

BJs Wholesale  ECHO INVESTMENT

Pay attention - limited upside

The 3 months correlation between BJs and ECHO is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding BJs Wholesale Club and ECHO INVESTMENT ZY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ECHO INVESTMENT ZY 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 ECHO INVESTMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ECHO INVESTMENT ZY has no effect on the direction of BJs Wholesale i.e., BJs Wholesale and ECHO INVESTMENT go up and down completely randomly.

Pair Corralation between BJs Wholesale and ECHO INVESTMENT

Assuming the 90 days horizon BJs Wholesale Club is expected to under-perform the ECHO INVESTMENT. In addition to that, BJs Wholesale is 1.08 times more volatile than ECHO INVESTMENT ZY. It trades about -0.1 of its total potential returns per unit of risk. ECHO INVESTMENT ZY is currently generating about 0.1 per unit of volatility. If you would invest  110.00  in ECHO INVESTMENT ZY on May 5, 2025 and sell it today you would earn a total of  12.00  from holding ECHO INVESTMENT ZY or generate 10.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

BJs Wholesale Club  vs.  ECHO INVESTMENT ZY

BJs Wholesale Club

Risk-Adjusted Performance

Very Weak

Over the last 90 days BJs Wholesale Club has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

ECHO INVESTMENT ZY

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ECHO INVESTMENT ZY are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, ECHO INVESTMENT may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with BJs Wholesale and ECHO INVESTMENT

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

The idea behind BJs Wholesale Club and ECHO INVESTMENT ZY 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.