Correlation Between BJs Restaurants and American Airlines
Can any of the company-specific risk be diversified away by investing in both BJs Restaurants and American Airlines 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 Airlines 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 Airlines Group, you can compare the effects of market volatilities on BJs Restaurants and American Airlines 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 Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of BJs Restaurants and American Airlines.
Diversification Opportunities for BJs Restaurants and American Airlines
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BJs and American is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding BJs Restaurants and American Airlines Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Airlines 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 Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Airlines has no effect on the direction of BJs Restaurants i.e., BJs Restaurants and American Airlines go up and down completely randomly.
Pair Corralation between BJs Restaurants and American Airlines
Assuming the 90 days trading horizon BJs Restaurants is expected to generate 1.13 times more return on investment than American Airlines. However, BJs Restaurants is 1.13 times more volatile than American Airlines Group. It trades about 0.04 of its potential returns per unit of risk. American Airlines Group is currently generating about 0.02 per unit of risk. If you would invest 2,960 in BJs Restaurants on August 17, 2025 and sell it today you would earn a total of 140.00 from holding BJs Restaurants or generate 4.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BJs Restaurants vs. American Airlines Group
Performance |
| Timeline |
| BJs Restaurants |
| American Airlines |
BJs Restaurants and American Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BJs Restaurants and American Airlines
The main advantage of trading using opposite BJs Restaurants and American Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BJs Restaurants position performs unexpectedly, American Airlines 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 Airlines will offset losses from the drop in American Airlines' long position.| BJs Restaurants vs. Coeur Mining | BJs Restaurants vs. Ringmetall SE | BJs Restaurants vs. FIREWEED METALS P | BJs Restaurants vs. THAI BEVERAGE |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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