Correlation Between BJs Restaurants and First Guaranty

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

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

Diversification Opportunities for BJs Restaurants and First Guaranty

-0.13

Correlation Coefficient

BJs Restaurants  First Guaranty

Good diversification

The 3 months correlation between BJs and First is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and First Guaranty Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Guaranty Bancshares 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 First Guaranty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Guaranty Bancshares has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and First Guaranty go up and down completely randomly.

Pair Corralation between BJs Restaurants and First Guaranty

Given the investment horizon of 90 days BJs Restaurants is expected to under-perform the First Guaranty. But the stock apears to be less risky and, when comparing its historical volatility, BJs Restaurants is 1.22 times less risky than First Guaranty. The stock trades about -0.09 of its potential returns per unit of risk. The First Guaranty Bancshares is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  865.00  in First Guaranty Bancshares on July 31, 2025 and sell it today you would lose (60.00) from holding First Guaranty Bancshares or give up 6.94% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

BJs Restaurants  vs.  First Guaranty Bancshares

BJs Restaurants

Risk-Adjusted Performance

Weakest

Over the last 90 days BJs Restaurants has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating 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.

First Guaranty Bancshares

Risk-Adjusted Performance

Weakest

Over the last 90 days First Guaranty Bancshares has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, First Guaranty is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with BJs Restaurants and First Guaranty

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

The idea behind BJs Restaurants and First Guaranty Bancshares 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.