Correlation Between Flanigans Enterprises and Booking Holdings
Can any of the company-specific risk be diversified away by investing in both Flanigans Enterprises and Booking 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 Booking 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 Booking Holdings, you can compare the effects of market volatilities on Flanigans Enterprises and Booking 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 Booking Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flanigans Enterprises and Booking Holdings.
Diversification Opportunities for Flanigans Enterprises and Booking Holdings
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Flanigans and Booking is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Flanigans Enterprises and Booking Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Booking 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 Booking Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Booking Holdings has no effect on the direction of Flanigans Enterprises i.e., Flanigans Enterprises and Booking Holdings go up and down completely randomly.
Pair Corralation between Flanigans Enterprises and Booking Holdings
Considering the 90-day investment horizon Flanigans Enterprises is expected to under-perform the Booking Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Flanigans Enterprises is 1.87 times less risky than Booking Holdings. The stock trades about -0.2 of its potential returns per unit of risk. The Booking Holdings is currently generating about 0.45 of returns per unit of risk over similar time horizon. If you would invest 442,754 in Booking Holdings on August 30, 2024 and sell it today you would earn a total of 79,561 from holding Booking Holdings or generate 17.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Flanigans Enterprises vs. Booking Holdings
Performance |
| Timeline |
| Flanigans Enterprises |
| Booking Holdings |
Flanigans Enterprises and Booking Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flanigans Enterprises and Booking Holdings
The main advantage of trading using opposite Flanigans Enterprises and Booking Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flanigans Enterprises position performs unexpectedly, Booking 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 Booking Holdings will offset losses from the drop in Booking Holdings' long position.| Flanigans Enterprises vs. FAT Brands | Flanigans Enterprises vs. Potbelly Co | Flanigans Enterprises vs. BJs Restaurants | Flanigans Enterprises vs. One Group Hospitality |
| Booking Holdings vs. TripAdvisor | Booking Holdings vs. Airbnb Inc | Booking Holdings vs. Royal Caribbean Cruises | Booking Holdings vs. Norwegian Cruise Line |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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