Correlation Between Flanigans Enterprises and Ruths Hospitality
Can any of the company-specific risk be diversified away by investing in both Flanigans Enterprises and Ruths Hospitality 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 Ruths Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flanigans Enterprises and Ruths Hospitality Group, you can compare the effects of market volatilities on Flanigans Enterprises and Ruths Hospitality 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 Ruths Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flanigans Enterprises and Ruths Hospitality.
Diversification Opportunities for Flanigans Enterprises and Ruths Hospitality
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Flanigans and Ruths is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Flanigans Enterprises and Ruths Hospitality Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ruths Hospitality 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 Ruths Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ruths Hospitality has no effect on the direction of Flanigans Enterprises i.e., Flanigans Enterprises and Ruths Hospitality go up and down completely randomly.
Pair Corralation between Flanigans Enterprises and Ruths Hospitality
Considering the 90-day investment horizon Flanigans Enterprises is expected to generate 13.08 times more return on investment than Ruths Hospitality. However, Flanigans Enterprises is 13.08 times more volatile than Ruths Hospitality Group. It trades about 0.04 of its potential returns per unit of risk. Ruths Hospitality Group is currently generating about 0.06 per unit of risk. If you would invest 2,652 in Flanigans Enterprises on August 31, 2024 and sell it today you would lose (177.00) from holding Flanigans Enterprises or give up 6.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 24.34% |
| Values | Daily Returns |
Flanigans Enterprises vs. Ruths Hospitality Group
Performance |
| Timeline |
| Flanigans Enterprises |
| Ruths Hospitality |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Flanigans Enterprises and Ruths Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flanigans Enterprises and Ruths Hospitality
The main advantage of trading using opposite Flanigans Enterprises and Ruths Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flanigans Enterprises position performs unexpectedly, Ruths Hospitality 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 Ruths Hospitality will offset losses from the drop in Ruths Hospitality's long position.| Flanigans Enterprises vs. FAT Brands | Flanigans Enterprises vs. Potbelly Co | Flanigans Enterprises vs. BJs Restaurants | Flanigans Enterprises vs. One Group Hospitality |
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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