Correlation Between Auburn National and Bloomin Brands
Can any of the company-specific risk be diversified away by investing in both Auburn National and Bloomin Brands 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 Auburn National and Bloomin Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auburn National Bancorporation and Bloomin Brands, you can compare the effects of market volatilities on Auburn National and Bloomin Brands 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 Auburn National with a short position of Bloomin Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auburn National and Bloomin Brands.
Diversification Opportunities for Auburn National and Bloomin Brands
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Auburn and Bloomin is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Auburn National Bancorp. and Bloomin Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bloomin Brands and Auburn National 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 Auburn National Bancorporation are associated (or correlated) with Bloomin Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bloomin Brands has no effect on the direction of Auburn National i.e., Auburn National and Bloomin Brands go up and down completely randomly.
Pair Corralation between Auburn National and Bloomin Brands
Given the investment horizon of 90 days Auburn National Bancorporation is expected to generate 0.74 times more return on investment than Bloomin Brands. However, Auburn National Bancorporation is 1.36 times less risky than Bloomin Brands. It trades about 0.01 of its potential returns per unit of risk. Bloomin Brands is currently generating about -0.08 per unit of risk. If you would invest 2,314 in Auburn National Bancorporation on October 7, 2024 and sell it today you would earn a total of 3.00 from holding Auburn National Bancorporation or generate 0.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Auburn National Bancorp. vs. Bloomin Brands
Performance |
| Timeline |
| Auburn National Banc |
| Bloomin Brands |
Auburn National and Bloomin Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auburn National and Bloomin Brands
The main advantage of trading using opposite Auburn National and Bloomin Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auburn National position performs unexpectedly, Bloomin Brands 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 Bloomin Brands will offset losses from the drop in Bloomin Brands' long position.| Auburn National vs. Banco Santander Brasil | Auburn National vs. CrossFirst Bankshares | Auburn National vs. CF Bankshares | Auburn National vs. Grupo Aval |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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