Correlation Between Restaurant Brands and FAIR ISAAC
Can any of the company-specific risk be diversified away by investing in both Restaurant Brands and FAIR ISAAC 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 Restaurant Brands and FAIR ISAAC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Restaurant Brands International and FAIR ISAAC, you can compare the effects of market volatilities on Restaurant Brands and FAIR ISAAC 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 Restaurant Brands with a short position of FAIR ISAAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Restaurant Brands and FAIR ISAAC.
Diversification Opportunities for Restaurant Brands and FAIR ISAAC
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Restaurant and FAIR is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Restaurant Brands Internationa and FAIR ISAAC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FAIR ISAAC and Restaurant Brands 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 Restaurant Brands International are associated (or correlated) with FAIR ISAAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FAIR ISAAC has no effect on the direction of Restaurant Brands i.e., Restaurant Brands and FAIR ISAAC go up and down completely randomly.
Pair Corralation between Restaurant Brands and FAIR ISAAC
If you would invest 63,000 in FAIR ISAAC on October 25, 2024 and sell it today you would earn a total of 116,850 from holding FAIR ISAAC or generate 185.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 0.2% |
| Values | Daily Returns |
Restaurant Brands Internationa vs. FAIR ISAAC
Performance |
| Timeline |
| Restaurant Brands |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| FAIR ISAAC |
Restaurant Brands and FAIR ISAAC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Restaurant Brands and FAIR ISAAC
The main advantage of trading using opposite Restaurant Brands and FAIR ISAAC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Restaurant Brands position performs unexpectedly, FAIR ISAAC 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 FAIR ISAAC will offset losses from the drop in FAIR ISAAC's long position.| Restaurant Brands vs. Regal Hotels International | Restaurant Brands vs. Wyndham Hotels Resorts | Restaurant Brands vs. RCI Hospitality Holdings | Restaurant Brands vs. Choice Hotels International |
| FAIR ISAAC vs. United Breweries Co | FAIR ISAAC vs. TreeHouse Foods | FAIR ISAAC vs. PURE FOODS TASMANIA | FAIR ISAAC vs. Fevertree Drinks PLC |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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