Correlation Between Biglari Holdings and Advanced Micro
Can any of the company-specific risk be diversified away by investing in both Biglari Holdings and Advanced Micro 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 Biglari Holdings and Advanced Micro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Biglari Holdings and Advanced Micro Devices, you can compare the effects of market volatilities on Biglari Holdings and Advanced Micro 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 Biglari Holdings with a short position of Advanced Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biglari Holdings and Advanced Micro.
Diversification Opportunities for Biglari Holdings and Advanced Micro
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Biglari and Advanced is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Biglari Holdings and Advanced Micro Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Micro Devices and Biglari Holdings 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 Biglari Holdings are associated (or correlated) with Advanced Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Micro Devices has no effect on the direction of Biglari Holdings i.e., Biglari Holdings and Advanced Micro go up and down completely randomly.
Pair Corralation between Biglari Holdings and Advanced Micro
Allowing for the 90-day total investment horizon Biglari Holdings is expected to generate 1.57 times more return on investment than Advanced Micro. However, Biglari Holdings is 1.57 times more volatile than Advanced Micro Devices. It trades about 0.4 of its potential returns per unit of risk. Advanced Micro Devices is currently generating about 0.06 per unit of risk. If you would invest 17,300 in Biglari Holdings on September 5, 2024 and sell it today you would earn a total of 5,118 from holding Biglari Holdings or generate 29.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Biglari Holdings vs. Advanced Micro Devices
Performance |
| Timeline |
| Biglari Holdings |
| Advanced Micro Devices |
Biglari Holdings and Advanced Micro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Biglari Holdings and Advanced Micro
The main advantage of trading using opposite Biglari Holdings and Advanced Micro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biglari Holdings position performs unexpectedly, Advanced Micro 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 Advanced Micro will offset losses from the drop in Advanced Micro's long position.| Biglari Holdings vs. Cannae Holdings | Biglari Holdings vs. BJs Restaurants | Biglari Holdings vs. Ark Restaurants Corp | Biglari Holdings vs. Noble Romans |
| Advanced Micro vs. NXP Semiconductors NV | Advanced Micro vs. Monolithic Power Systems | Advanced Micro vs. ON Semiconductor | Advanced Micro vs. GSI Technology |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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