Correlation Between BurgerFi International and Bloomin Brands
Can any of the company-specific risk be diversified away by investing in both BurgerFi International and Bloomin 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 BurgerFi International and Bloomin Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BurgerFi International LLC and Bloomin Brands, you can compare the effects of market volatilities on BurgerFi International and Bloomin 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 BurgerFi International with a short position of Bloomin Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of BurgerFi International and Bloomin Brands.
Diversification Opportunities for BurgerFi International and Bloomin Brands
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between BurgerFi and Bloomin is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding BurgerFi International LLC and Bloomin Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bloomin Brands and BurgerFi International 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 BurgerFi International LLC are associated (or correlated) with Bloomin Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bloomin Brands has no effect on the direction of BurgerFi International i.e., BurgerFi International and Bloomin Brands go up and down completely randomly.
Pair Corralation between BurgerFi International and Bloomin Brands
Assuming the 90 days horizon BurgerFi International LLC is expected to generate 8.63 times more return on investment than Bloomin Brands. However, BurgerFi International is 8.63 times more volatile than Bloomin Brands. It trades about 0.1 of its potential returns per unit of risk. Bloomin Brands is currently generating about -0.08 per unit of risk. If you would invest 1.54 in BurgerFi International LLC on August 31, 2024 and sell it today you would lose (0.64) from holding BurgerFi International LLC or give up 41.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 61.42% |
| Values | Daily Returns |
BurgerFi International LLC vs. Bloomin Brands
Performance |
| Timeline |
| BurgerFi International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| Bloomin Brands |
BurgerFi International and Bloomin Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BurgerFi International and Bloomin Brands
The main advantage of trading using opposite BurgerFi International and Bloomin Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BurgerFi International position performs unexpectedly, Bloomin 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 Bloomin Brands will offset losses from the drop in Bloomin Brands' long position.| BurgerFi International vs. Canoo Holdings | BurgerFi International vs. Landsea Homes | BurgerFi International vs. Nuvve Holding Corp |
| Bloomin Brands vs. Dine Brands Global | Bloomin Brands vs. BJs Restaurants | Bloomin Brands vs. The Cheesecake Factory | Bloomin Brands vs. Brinker International |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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