Correlation Between Bagger Daves and Red Robin
Can any of the company-specific risk be diversified away by investing in both Bagger Daves and Red Robin 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 Red Robin 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 Red Robin Gourmet, you can compare the effects of market volatilities on Bagger Daves and Red Robin 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 Red Robin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bagger Daves and Red Robin.
Diversification Opportunities for Bagger Daves and Red Robin
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bagger and Red is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Bagger Daves Burger and Red Robin Gourmet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Red Robin Gourmet 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 Red Robin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Red Robin Gourmet has no effect on the direction of Bagger Daves i.e., Bagger Daves and Red Robin go up and down completely randomly.
Pair Corralation between Bagger Daves and Red Robin
Given the investment horizon of 90 days Bagger Daves Burger is expected to generate 1.0 times more return on investment than Red Robin. However, Bagger Daves Burger is 1.0 times less risky than Red Robin. It trades about -0.26 of its potential returns per unit of risk. Red Robin Gourmet is currently generating about -0.57 per unit of risk. If you would invest 5.70 in Bagger Daves Burger on November 28, 2024 and sell it today you would lose (0.89) from holding Bagger Daves Burger or give up 15.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Bagger Daves Burger vs. Red Robin Gourmet
Performance |
| Timeline |
| Bagger Daves Burger |
| Red Robin Gourmet |
Bagger Daves and Red Robin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bagger Daves and Red Robin
The main advantage of trading using opposite Bagger Daves and Red Robin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bagger Daves position performs unexpectedly, Red Robin 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 Red Robin will offset losses from the drop in Red Robin's long position.| Bagger Daves vs. Alsea SAB de | Bagger Daves vs. Marstons PLC | Bagger Daves vs. Marstons PLC | Bagger Daves vs. Spot Coffee |
| Red Robin vs. Dine Brands Global | Red Robin vs. Bloomin Brands | Red Robin vs. BJs Restaurants | Red Robin vs. The Cheesecake Factory |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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