Correlation Between Carvana and BJs Wholesale
Can any of the company-specific risk be diversified away by investing in both Carvana and BJs Wholesale 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 Carvana and BJs Wholesale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carvana Co and BJs Wholesale Club, you can compare the effects of market volatilities on Carvana and BJs Wholesale 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 Carvana with a short position of BJs Wholesale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carvana and BJs Wholesale.
Diversification Opportunities for Carvana and BJs Wholesale
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Carvana and BJs is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Carvana Co and BJs Wholesale Club in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BJs Wholesale Club and Carvana 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 Carvana Co are associated (or correlated) with BJs Wholesale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BJs Wholesale Club has no effect on the direction of Carvana i.e., Carvana and BJs Wholesale go up and down completely randomly.
Pair Corralation between Carvana and BJs Wholesale
Given the investment horizon of 90 days Carvana Co is expected to generate 5.04 times more return on investment than BJs Wholesale. However, Carvana is 5.04 times more volatile than BJs Wholesale Club. It trades about 0.15 of its potential returns per unit of risk. BJs Wholesale Club is currently generating about 0.01 per unit of risk. If you would invest 693.00 in Carvana Co on January 26, 2024 and sell it today you would earn a total of 6,842 from holding Carvana Co or generate 987.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carvana Co vs. BJs Wholesale Club
Performance |
| Timeline |
| Carvana |
| BJs Wholesale Club |
Carvana and BJs Wholesale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carvana and BJs Wholesale
The main advantage of trading using opposite Carvana and BJs Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carvana position performs unexpectedly, BJs Wholesale 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 Wholesale will offset losses from the drop in BJs Wholesale's long position.| Carvana vs. Cazoo Group | Carvana vs. CarMax Inc | Carvana vs. U Power Limited | Carvana vs. SunCar Technology Group |
| BJs Wholesale vs. Big Lots | BJs Wholesale vs. Dollar Tree | BJs Wholesale vs. Dicks Sporting Goods | BJs Wholesale vs. Williams Sonoma |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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