Correlation Between Bagger Daves and FAT Brands
Can any of the company-specific risk be diversified away by investing in both Bagger Daves and FAT 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 FAT 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 FAT Brands, you can compare the effects of market volatilities on Bagger Daves and FAT 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 FAT Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bagger Daves and FAT Brands.
Diversification Opportunities for Bagger Daves and FAT Brands
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bagger and FAT is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Bagger Daves Burger and FAT Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FAT Brands 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 FAT Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FAT Brands has no effect on the direction of Bagger Daves i.e., Bagger Daves and FAT Brands go up and down completely randomly.
Pair Corralation between Bagger Daves and FAT Brands
Given the investment horizon of 90 days Bagger Daves Burger is expected to under-perform the FAT Brands. In addition to that, Bagger Daves is 1.42 times more volatile than FAT Brands. It trades about -0.07 of its total potential returns per unit of risk. FAT Brands is currently generating about -0.02 per unit of volatility. If you would invest 455.00 in FAT Brands on August 28, 2024 and sell it today you would lose (13.00) from holding FAT Brands or give up 2.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bagger Daves Burger vs. FAT Brands
Performance |
| Timeline |
| Bagger Daves Burger |
| FAT Brands |
Bagger Daves and FAT Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bagger Daves and FAT Brands
The main advantage of trading using opposite Bagger Daves and FAT Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bagger Daves position performs unexpectedly, FAT 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 FAT Brands will offset losses from the drop in FAT Brands' long position.| Bagger Daves vs. Alsea SAB de | Bagger Daves vs. Marstons PLC | Bagger Daves vs. Marstons PLC | Bagger Daves vs. Spot Coffee |
| FAT Brands vs. FAT Brands | FAT Brands vs. Brinker International | FAT Brands vs. Jack In The | FAT Brands vs. Potbelly Co |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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