Correlation Between BJs Restaurants and American Woodmark
Can any of the company-specific risk be diversified away by investing in both BJs Restaurants and American Woodmark 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 American Woodmark into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BJs Restaurants and American Woodmark, you can compare the effects of market volatilities on BJs Restaurants and American Woodmark 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 American Woodmark. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Restaurants and American Woodmark.
Diversification Opportunities for BJs Restaurants and American Woodmark
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BJs and American is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and American Woodmark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Woodmark 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 American Woodmark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Woodmark has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and American Woodmark go up and down completely randomly.
Pair Corralation between BJs Restaurants and American Woodmark
Given the investment horizon of 90 days BJs Restaurants is expected to generate 1.04 times more return on investment than American Woodmark. However, BJs Restaurants is 1.04 times more volatile than American Woodmark. It trades about 0.03 of its potential returns per unit of risk. American Woodmark is currently generating about -0.01 per unit of risk. If you would invest 3,034 in BJs Restaurants on August 17, 2025 and sell it today you would earn a total of 616.00 from holding BJs Restaurants or generate 20.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BJs Restaurants vs. American Woodmark
Performance |
| Timeline |
| BJs Restaurants |
| American Woodmark |
BJs Restaurants and American Woodmark Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Restaurants and American Woodmark
The main advantage of trading using opposite BJs Restaurants and American Woodmark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Restaurants position performs unexpectedly, American Woodmark 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 American Woodmark will offset losses from the drop in American Woodmark's long position.| BJs Restaurants vs. Sweetgreen | BJs Restaurants vs. Cracker Barrel Old | BJs Restaurants vs. Liquidity Services | BJs Restaurants vs. Bloomin Brands |
| American Woodmark vs. LGI Homes | American Woodmark vs. Ethan Allen Interiors | American Woodmark vs. MillerKnoll | American Woodmark vs. Standard Motor Products |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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