Correlation Between Bagger Daves and Good Times
Can any of the company-specific risk be diversified away by investing in both Bagger Daves and Good Times 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 Good Times 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 Good Times Restaurants, you can compare the effects of market volatilities on Bagger Daves and Good Times 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 Good Times. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bagger Daves and Good Times.
Diversification Opportunities for Bagger Daves and Good Times
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bagger and Good is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Bagger Daves Burger and Good Times Restaurants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Good Times Restaurants 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 Good Times. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Good Times Restaurants has no effect on the direction of Bagger Daves i.e., Bagger Daves and Good Times go up and down completely randomly.
Pair Corralation between Bagger Daves and Good Times
Given the investment horizon of 90 days Bagger Daves Burger is expected to under-perform the Good Times. In addition to that, Bagger Daves is 1.57 times more volatile than Good Times Restaurants. It trades about -0.29 of its total potential returns per unit of risk. Good Times Restaurants is currently generating about -0.08 per unit of volatility. If you would invest 254.00 in Good Times Restaurants on November 18, 2024 and sell it today you would lose (9.00) from holding Good Times Restaurants or give up 3.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Bagger Daves Burger vs. Good Times Restaurants
Performance |
| Timeline |
| Bagger Daves Burger |
| Good Times Restaurants |
Bagger Daves and Good Times Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bagger Daves and Good Times
The main advantage of trading using opposite Bagger Daves and Good Times positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bagger Daves position performs unexpectedly, Good Times 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 Good Times will offset losses from the drop in Good Times' long position.| Bagger Daves vs. Alsea SAB de | Bagger Daves vs. Marstons PLC | Bagger Daves vs. Marstons PLC | Bagger Daves vs. Spot Coffee |
| Good Times vs. Nathans Famous | Good Times vs. FAT Brands | Good Times vs. El Pollo Loco | Good Times vs. Ark Restaurants Corp |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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