Correlation Between Flanigans Enterprises and Biglari Holdings
Can any of the company-specific risk be diversified away by investing in both Flanigans Enterprises and Biglari Holdings 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 Flanigans Enterprises and Biglari Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flanigans Enterprises and Biglari Holdings, you can compare the effects of market volatilities on Flanigans Enterprises and Biglari Holdings 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 Flanigans Enterprises with a short position of Biglari Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flanigans Enterprises and Biglari Holdings.
Diversification Opportunities for Flanigans Enterprises and Biglari Holdings
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Flanigans and Biglari is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Flanigans Enterprises and Biglari Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biglari Holdings and Flanigans Enterprises 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 Flanigans Enterprises are associated (or correlated) with Biglari Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biglari Holdings has no effect on the direction of Flanigans Enterprises i.e., Flanigans Enterprises and Biglari Holdings go up and down completely randomly.
Pair Corralation between Flanigans Enterprises and Biglari Holdings
Considering the 90-day investment horizon Flanigans Enterprises is expected to generate 0.43 times more return on investment than Biglari Holdings. However, Flanigans Enterprises is 2.33 times less risky than Biglari Holdings. It trades about 0.02 of its potential returns per unit of risk. Biglari Holdings is currently generating about -0.18 per unit of risk. If you would invest 2,475 in Flanigans Enterprises on November 5, 2024 and sell it today you would earn a total of 12.00 from holding Flanigans Enterprises or generate 0.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flanigans Enterprises vs. Biglari Holdings
Performance |
| Timeline |
| Flanigans Enterprises |
| Biglari Holdings |
Flanigans Enterprises and Biglari Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flanigans Enterprises and Biglari Holdings
The main advantage of trading using opposite Flanigans Enterprises and Biglari Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flanigans Enterprises position performs unexpectedly, Biglari Holdings 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 Biglari Holdings will offset losses from the drop in Biglari Holdings' long position.| Flanigans Enterprises vs. FAT Brands | Flanigans Enterprises vs. Potbelly Co | Flanigans Enterprises vs. BJs Restaurants | Flanigans Enterprises vs. One Group Hospitality |
| Biglari Holdings vs. Flanigans Enterprises | Biglari Holdings vs. BJs Restaurants | Biglari Holdings vs. Brinker International | Biglari Holdings vs. Bloomin Brands |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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