Correlation Between Etsy and BJs Wholesale
Can any of the company-specific risk be diversified away by investing in both Etsy 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 Etsy and BJs Wholesale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Etsy Inc and BJs Wholesale Club, you can compare the effects of market volatilities on Etsy 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 Etsy with a short position of BJs Wholesale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Etsy and BJs Wholesale.
Diversification Opportunities for Etsy and BJs Wholesale
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Etsy and BJs is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Etsy Inc 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 Etsy 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 Etsy Inc 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 Etsy i.e., Etsy and BJs Wholesale go up and down completely randomly.
Pair Corralation between Etsy and BJs Wholesale
Given the investment horizon of 90 days Etsy Inc is expected to generate 1.17 times more return on investment than BJs Wholesale. However, Etsy is 1.17 times more volatile than BJs Wholesale Club. It trades about -0.03 of its potential returns per unit of risk. BJs Wholesale Club is currently generating about -0.19 per unit of risk. If you would invest 6,851 in Etsy Inc on January 20, 2024 and sell it today you would lose (117.00) from holding Etsy Inc or give up 1.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Etsy Inc vs. BJs Wholesale Club
Performance |
| Timeline |
| Etsy Inc |
| BJs Wholesale Club |
Etsy and BJs Wholesale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Etsy and BJs Wholesale
The main advantage of trading using opposite Etsy and BJs Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Etsy 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.The idea behind Etsy Inc and BJs Wholesale Club 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.| BJs Wholesale vs. Aquagold International | BJs Wholesale vs. Morningstar Unconstrained Allocation | BJs Wholesale vs. Thrivent High Yield | BJs Wholesale vs. Via Renewables |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |