Correlation Between Flanigans Enterprises and Carriage Services
Can any of the company-specific risk be diversified away by investing in both Flanigans Enterprises and Carriage Services 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 Carriage Services into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flanigans Enterprises and Carriage Services, you can compare the effects of market volatilities on Flanigans Enterprises and Carriage Services 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 Carriage Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flanigans Enterprises and Carriage Services.
Diversification Opportunities for Flanigans Enterprises and Carriage Services
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Flanigans and Carriage is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Flanigans Enterprises and Carriage Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carriage Services 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 Carriage Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carriage Services has no effect on the direction of Flanigans Enterprises i.e., Flanigans Enterprises and Carriage Services go up and down completely randomly.
Pair Corralation between Flanigans Enterprises and Carriage Services
Considering the 90-day investment horizon Flanigans Enterprises is expected to under-perform the Carriage Services. But the stock apears to be less risky and, when comparing its historical volatility, Flanigans Enterprises is 3.99 times less risky than Carriage Services. The stock trades about -0.16 of its potential returns per unit of risk. The Carriage Services is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 3,256 in Carriage Services on August 31, 2024 and sell it today you would earn a total of 783.00 from holding Carriage Services or generate 24.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Flanigans Enterprises vs. Carriage Services
Performance |
| Timeline |
| Flanigans Enterprises |
| Carriage Services |
Flanigans Enterprises and Carriage Services Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flanigans Enterprises and Carriage Services
The main advantage of trading using opposite Flanigans Enterprises and Carriage Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flanigans Enterprises position performs unexpectedly, Carriage Services 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 Carriage Services will offset losses from the drop in Carriage Services' long position.| Flanigans Enterprises vs. FAT Brands | Flanigans Enterprises vs. Potbelly Co | Flanigans Enterprises vs. BJs Restaurants | Flanigans Enterprises vs. One Group Hospitality |
| Carriage Services vs. Bright Horizons Family | Carriage Services vs. Service International | Carriage Services vs. Mister Car Wash | Carriage Services vs. Rollins |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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