Correlation Between BJs Restaurants and Predictive Oncology

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

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

Diversification Opportunities for BJs Restaurants and Predictive Oncology

-0.39

Correlation Coefficient

BJs Restaurants  Predictive Oncology

Very good diversification

The 3 months correlation between BJs and Predictive is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and Predictive Oncology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Predictive Oncology 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 Predictive Oncology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Predictive Oncology has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and Predictive Oncology go up and down completely randomly.

Pair Corralation between BJs Restaurants and Predictive Oncology

Given the investment horizon of 90 days BJs Restaurants is expected to generate 0.65 times more return on investment than Predictive Oncology. However, BJs Restaurants is 1.53 times less risky than Predictive Oncology. It trades about 0.11 of its potential returns per unit of risk. Predictive Oncology is currently generating about -0.02 per unit of risk. If you would invest  3,280  in BJs Restaurants on April 20, 2025 and sell it today you would earn a total of  610.00  from holding BJs Restaurants or generate 18.6% return on investment over 90 days.

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

BJs Restaurants  vs.  Predictive Oncology

BJs Restaurants

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BJs Restaurants are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, BJs Restaurants demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Predictive Oncology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Predictive Oncology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Predictive Oncology is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with BJs Restaurants and Predictive Oncology

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

The idea behind BJs Restaurants and Predictive Oncology 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.