Correlation Between Bagger Daves and Dine Brands
Can any of the company-specific risk be diversified away by investing in both Bagger Daves and Dine 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 Bagger Daves and Dine Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bagger Daves Burger and Dine Brands Global, you can compare the effects of market volatilities on Bagger Daves and Dine 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 Bagger Daves with a short position of Dine Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bagger Daves and Dine Brands.
Diversification Opportunities for Bagger Daves and Dine Brands
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bagger and Dine is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Bagger Daves Burger and Dine Brands Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dine Brands Global and Bagger Daves 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 Bagger Daves Burger are associated (or correlated) with Dine Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dine Brands Global has no effect on the direction of Bagger Daves i.e., Bagger Daves and Dine Brands go up and down completely randomly.
Pair Corralation between Bagger Daves and Dine Brands
Given the investment horizon of 90 days Bagger Daves Burger is expected to under-perform the Dine Brands. In addition to that, Bagger Daves is 1.09 times more volatile than Dine Brands Global. It trades about -0.07 of its total potential returns per unit of risk. Dine Brands Global is currently generating about 0.16 per unit of volatility. If you would invest 3,077 in Dine Brands Global on August 30, 2024 and sell it today you would earn a total of 430.00 from holding Dine Brands Global or generate 13.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bagger Daves Burger vs. Dine Brands Global
Performance |
| Timeline |
| Bagger Daves Burger |
| Dine Brands Global |
Bagger Daves and Dine Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bagger Daves and Dine Brands
The main advantage of trading using opposite Bagger Daves and Dine Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bagger Daves position performs unexpectedly, Dine 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 Dine Brands will offset losses from the drop in Dine Brands' long position.| Bagger Daves vs. Alsea SAB de | Bagger Daves vs. Marstons PLC | Bagger Daves vs. Marstons PLC | Bagger Daves vs. Spot Coffee |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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