Correlation Between Flanigans Enterprises and Marriott International
Can any of the company-specific risk be diversified away by investing in both Flanigans Enterprises and Marriott International 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 Marriott International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flanigans Enterprises and Marriott International, you can compare the effects of market volatilities on Flanigans Enterprises and Marriott International 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 Marriott International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flanigans Enterprises and Marriott International.
Diversification Opportunities for Flanigans Enterprises and Marriott International
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Flanigans and Marriott is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Flanigans Enterprises and Marriott International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marriott International 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 Marriott International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marriott International has no effect on the direction of Flanigans Enterprises i.e., Flanigans Enterprises and Marriott International go up and down completely randomly.
Pair Corralation between Flanigans Enterprises and Marriott International
Considering the 90-day investment horizon Flanigans Enterprises is expected to under-perform the Marriott International. But the stock apears to be less risky and, when comparing its historical volatility, Flanigans Enterprises is 1.84 times less risky than Marriott International. The stock trades about -0.21 of its potential returns per unit of risk. The Marriott International is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 26,330 in Marriott International on August 30, 2024 and sell it today you would earn a total of 2,230 from holding Marriott International or generate 8.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
Flanigans Enterprises vs. Marriott International
Performance |
| Timeline |
| Flanigans Enterprises |
| Marriott International |
Flanigans Enterprises and Marriott International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flanigans Enterprises and Marriott International
The main advantage of trading using opposite Flanigans Enterprises and Marriott International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flanigans Enterprises position performs unexpectedly, Marriott International 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 Marriott International will offset losses from the drop in Marriott International's long position.| Flanigans Enterprises vs. FAT Brands | Flanigans Enterprises vs. Potbelly Co | Flanigans Enterprises vs. BJs Restaurants | Flanigans Enterprises vs. One Group Hospitality |
| Marriott International vs. Hyatt Hotels | Marriott International vs. InterContinental Hotels Group | Marriott International vs. Choice Hotels International | Marriott International vs. Wyndham Hotels Resorts |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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