Correlation Between Flanigans Enterprises and Choice Hotels
Can any of the company-specific risk be diversified away by investing in both Flanigans Enterprises and Choice Hotels 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 Choice Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flanigans Enterprises and Choice Hotels International, you can compare the effects of market volatilities on Flanigans Enterprises and Choice Hotels 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 Choice Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flanigans Enterprises and Choice Hotels.
Diversification Opportunities for Flanigans Enterprises and Choice Hotels
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Flanigans and Choice is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Flanigans Enterprises and Choice Hotels International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Choice Hotels Intern 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 Choice Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Choice Hotels Intern has no effect on the direction of Flanigans Enterprises i.e., Flanigans Enterprises and Choice Hotels go up and down completely randomly.
Pair Corralation between Flanigans Enterprises and Choice Hotels
Considering the 90-day investment horizon Flanigans Enterprises is expected to under-perform the Choice Hotels. But the stock apears to be less risky and, when comparing its historical volatility, Flanigans Enterprises is 1.23 times less risky than Choice Hotels. The stock trades about -0.21 of its potential returns per unit of risk. The Choice Hotels International is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 14,100 in Choice Hotels International on August 30, 2024 and sell it today you would earn a total of 961.00 from holding Choice Hotels International or generate 6.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Flanigans Enterprises vs. Choice Hotels International
Performance |
| Timeline |
| Flanigans Enterprises |
| Choice Hotels Intern |
Flanigans Enterprises and Choice Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flanigans Enterprises and Choice Hotels
The main advantage of trading using opposite Flanigans Enterprises and Choice Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flanigans Enterprises position performs unexpectedly, Choice Hotels 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 Choice Hotels will offset losses from the drop in Choice Hotels' long position.| Flanigans Enterprises vs. FAT Brands | Flanigans Enterprises vs. Potbelly Co | Flanigans Enterprises vs. BJs Restaurants | Flanigans Enterprises vs. One Group Hospitality |
| Choice Hotels vs. Hyatt Hotels | Choice Hotels vs. Hilton Worldwide Holdings | Choice Hotels vs. InterContinental Hotels Group | Choice Hotels vs. Marriott International |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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