Correlation Between Flanigans Enterprises and Dennys Corp
Can any of the company-specific risk be diversified away by investing in both Flanigans Enterprises and Dennys Corp 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 Dennys Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flanigans Enterprises and Dennys Corp, you can compare the effects of market volatilities on Flanigans Enterprises and Dennys Corp 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 Dennys Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flanigans Enterprises and Dennys Corp.
Diversification Opportunities for Flanigans Enterprises and Dennys Corp
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Flanigans and Dennys is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Flanigans Enterprises and Dennys Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dennys Corp 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 Dennys Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dennys Corp has no effect on the direction of Flanigans Enterprises i.e., Flanigans Enterprises and Dennys Corp go up and down completely randomly.
Pair Corralation between Flanigans Enterprises and Dennys Corp
Considering the 90-day investment horizon Flanigans Enterprises is expected to generate 20.48 times more return on investment than Dennys Corp. However, Flanigans Enterprises is 20.48 times more volatile than Dennys Corp. It trades about 0.05 of its potential returns per unit of risk. Dennys Corp is currently generating about -0.05 per unit of risk. If you would invest 3,063 in Flanigans Enterprises on September 12, 2024 and sell it today you would lose (563.00) from holding Flanigans Enterprises or give up 18.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 93.75% |
| Values | Daily Returns |
Flanigans Enterprises vs. Dennys Corp
Performance |
| Timeline |
| Flanigans Enterprises |
| Dennys Corp |
Flanigans Enterprises and Dennys Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flanigans Enterprises and Dennys Corp
The main advantage of trading using opposite Flanigans Enterprises and Dennys Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flanigans Enterprises position performs unexpectedly, Dennys Corp 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 Dennys Corp will offset losses from the drop in Dennys Corp's long position.| Flanigans Enterprises vs. Noble Romans | Flanigans Enterprises vs. Good Times Restaurants | Flanigans Enterprises vs. FAT Brands | Flanigans Enterprises vs. El Pollo Loco |
| Dennys Corp vs. Noble Romans | Dennys Corp vs. Good Times Restaurants | Dennys Corp vs. Flanigans Enterprises | Dennys Corp vs. FAT 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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