Correlation Between Hamilton Lane and BJs Restaurants

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

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

Diversification Opportunities for Hamilton Lane and BJs Restaurants

-0.25

Correlation Coefficient

Hamilton Lane  BJs Restaurants

Very good diversification

The 3 months correlation between Hamilton and BJs is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Hamilton Lane and BJs Restaurants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BJs Restaurants and Hamilton Lane 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 Hamilton Lane are associated (or correlated) with BJs Restaurants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BJs Restaurants has no effect on the direction of Hamilton Lane i.e., Hamilton Lane and BJs Restaurants go up and down completely randomly.

Pair Corralation between Hamilton Lane and BJs Restaurants

Given the investment horizon of 90 days Hamilton Lane is expected to generate 1.11 times more return on investment than BJs Restaurants. However, Hamilton Lane is 1.11 times more volatile than BJs Restaurants. It trades about -0.01 of its potential returns per unit of risk. BJs Restaurants is currently generating about -0.05 per unit of risk. If you would invest  15,709  in Hamilton Lane on May 6, 2025 and sell it today you would lose (619.00) from holding Hamilton Lane or give up 3.94% of portfolio value over 90 days.

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

Hamilton Lane  vs.  BJs Restaurants

Hamilton Lane

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hamilton Lane has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Hamilton Lane is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

BJs Restaurants

Risk-Adjusted Performance

Very Weak

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.

Pair Trading with Hamilton Lane and BJs Restaurants

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

The idea behind Hamilton Lane and BJs Restaurants 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.