Correlation Between Flanigans Enterprises and Yum Brands
Can any of the company-specific risk be diversified away by investing in both Flanigans Enterprises and Yum Brands 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 Yum Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flanigans Enterprises and Yum Brands, you can compare the effects of market volatilities on Flanigans Enterprises and Yum Brands 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 Yum Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flanigans Enterprises and Yum Brands.
Diversification Opportunities for Flanigans Enterprises and Yum Brands
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Flanigans and Yum is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Flanigans Enterprises and Yum Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yum Brands 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 Yum Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yum Brands has no effect on the direction of Flanigans Enterprises i.e., Flanigans Enterprises and Yum Brands go up and down completely randomly.
Pair Corralation between Flanigans Enterprises and Yum Brands
Considering the 90-day investment horizon Flanigans Enterprises is expected to generate 92.81 times more return on investment than Yum Brands. However, Flanigans Enterprises is 92.81 times more volatile than Yum Brands. It trades about 0.08 of its potential returns per unit of risk. Yum Brands is currently generating about 0.02 per unit of risk. If you would invest 2,607 in Flanigans Enterprises on September 13, 2024 and sell it today you would lose (141.00) from holding Flanigans Enterprises or give up 5.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.2% |
| Values | Daily Returns |
Flanigans Enterprises vs. Yum Brands
Performance |
| Timeline |
| Flanigans Enterprises |
| Yum Brands |
Flanigans Enterprises and Yum Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flanigans Enterprises and Yum Brands
The main advantage of trading using opposite Flanigans Enterprises and Yum Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flanigans Enterprises position performs unexpectedly, Yum Brands 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 Yum Brands will offset losses from the drop in Yum Brands' long position.| Flanigans Enterprises vs. Good Times Restaurants | Flanigans Enterprises vs. Auburn National Bancorporation |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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